9911796707
TMI Blog2014 (3) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... come for the Assessment Year 2008-09 on 26.09.2008 declaring income of Rs. 14,45,13,900/-. The return was processed under Section 143(1) of the IT Act and the case was taken up for scrutiny by issue of notice under Section 143(2) thereof on 13.08.2009. The Assessing Officer (for short 'the AO') after examining the case, completed the assessment by an order under Section 143(3) of the IT Act on 24.12.2010 determining the income of the assessee at Rs. 14,58,70,258/- wherein he made the following disallowances: (i) Disallowance u/s.36(1)(va) of Rs. 12,51,737/- (ii) Disallowance u/s.14A r/w Rule 8D of Rs. 1,04,621/-. In the present appeal, we are concerned only with the Disallowance under Section 36(1)(va) of the IT Act. 3. We have heard learned counsel for the parties for final disposal of the appeal at the stage of admission and even before the arguments were advanced, with their assistance, the following substantial question of law was framed: "Whether in law, the Tribunal was justified in affirming the finding of Assessing Officer in denying the appellant's claim of deductions of the employees contribution to PF/ESI alleging that the payment was not made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng lot of problem as discussed in the judgment of the Apex Court, on a representation made by the industry, subsequent amendment was carried out to mitigate the difficulties caused to the employer under Section 43B of the Act. Though such contributions are not paid within the time prescribed under the relevant act, if those contributions are paid before the due dated prescribed under Section 139(1) of the Act, the employer shall be entitled to the deductions as provided under Section 36(1) of the Act. While extending such benefit, the Parliament has not made any distinction between the employee's contribution and the employer's contribution. It is for the simple reason, under the provident fund scheme, an employer has to pay both the contribution and then recover from the salary of the employee. Therefore, in view of the aforesaid judgment, we do not find any substance in this appeal. Therefore, the appeal is dismissed." 7. The Gujarat High Court in Gujarat State Road Transport Corporation (supra) considered the question with respect to the disallowance of the amount being employees' contribution to PF Account/ESI Contribution which admittedly the assessee did not deposit with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that the employees' contribution to provident fund is also an income of the employer till he deposits the said amount along with his contribution with the fund, as contemplated under the provisions of the Section 36(1)(va) of the IT Act. 11. From bare perusal of this provision, we do find ourselves in agreement with Mr.Aravind, learned counsel for the revenue. But, in our opinion, that by itself is not sufficient to hold that the employer is not entitled for deduction as contemplated under Section 36(1)(va) of the IT Act r/w Section 43-B of the IT Act. 12. Section 36 provides for other deductions. Sub-section(1), thereof states that the deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in Section 28. We are concerned with Clause (va) of sub-section(1) of the Section 36 of the IT Act. It provides that any sum received by the assessee from any of his employees to which the provisions of sub-clause(x) of Clause(24) of Section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. In the explanation appen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h return." 15. From bare perusal of this provision, it is clear that under the provision, for IT Act, an extension is given to the employer to make payment of contribution to provident fund or any other fund till the "due date" applicable for furnishing the return of income under subsection (1) of section 139 of the IT Act in respect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with such return. In short, this provision states, notwithstanding anything contained in any other provision contained in this Act, a deduction otherwise allowable in this Act in respect of any sum payable by the assessee as an employer by way of contribution to any fund such as provident fund shall be allowed if it is paid on or before the due date as contemplated under Section 139(1) of the IT Act. This provision has nothing to do with the consequences, provided for under the PF Act/PF Scheme/ESI Act, for not depositing the "contribution" on or before the due dates therein. 16. In the present case, admittedly, though the employer did not deposit the contribution, within the stipulated time, as contemplated by ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
