TMI Blog2016 (9) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees and employer contribution and contribution means both employees and employer contribution under the PF scheme. Section 43B of the Act provides for certain deductions to be allowed only on actual payment basis. Sub clause (b) of section 43B of the Act covers any sum payable by the assessee as an employer by way of contribution to any Provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees. The proviso to section provides that any sum paid by the assessee on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made under the provisions of section 43B of the Act. A careful consideration of section 43B of the Act, it is clear that an extension is granted to the assessee to make the payment of PF contributions or any other fund till the due date of furnishing return of income u/s 139(1) of the Act. Therefore, in our opinion, there is no difference between employees and employer contribution to PF and if such contribution is made on or before the due date of furnishing return of income u/s 139(1) of the Act, then deduction is to be allowed under the provisions of section 43B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent fund. Therefore, issued a notice and asked to explain why said amount could not be treated as income u/s 2(24)(x) r.w.s. 36(1)(va) of the Act. In response to notice, the assessee submitted that the delay in remittances of employees contribution to Provident fund is unavoidable and reasons beyond control, such as the company is facing staff problem and also the PF authorities have introduced on line payments of PF remittances. The assessee further submitted that because of new system of online payment of PF remittances, its staff is not acquainted with the knowledge of submission of returns because of which it has hired outsiders to remit the payment, therefore, there is a delay in remittances of PF contribution. The assessee further submitted that though, there is a delay in remittances of employees contribution to PF within the due date specified under the respective Act, the same has been remitted on or before due date of furnishing return of income u/s 139(1) of the Act, therefore, the same should be allowed. In support of its submissions, relied upon certain judicial decisions. The A.O., after considering the explanations of the assessee held that as per the provisions of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions of the assessee and also following certain judicial decisions, held that the assessee would be entitled for deduction of employees contribution to PF made before the due date of filing return of income u/s 139(1) of the Act. With these observations, Ld. CIT(A) directed the A.O. to delete the additions made towards employees contribution to PF. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 4. The Ld. D.R. submitted that the CIT(A) erred in holding that the assessee would be entitled for deduction of employees contribution to PF made on or before the due date of filing return of income u/s 139(1) of the Act. The D.R. further argued that the Ld. CIT(A) erred in relying upon the provisions of section 43B of the Act for adjudicating the issue of employees contribution to PARTNERSHIP FIRM, as the said section is applicable only in respect of employer contribution to PF which operates on a different platform as compared to the provisions of section 36(1)(va) of the Act which is applicable to employees contribution. The D.R. further argued that the CIT(A) considered the case laws which is in favour of the assessee, but at the same time ignored the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no distinction between employer and employee contribution after omission of second proviso of section 43B of the Act by Finance Act, 2003 w.e.f. 1.4.2004. We find force in the arguments of the assessee for the reason that there is no difference between employees and employer contribution under the PF Act. Section 6 of Provident Fund Act provides for contribution and the manner in which such contribution shall be made. Paragraph 30 of the PF Scheme provides for payment of contributions. As per the said scheme, the employer at the first instance shall make the total contribution including employees share. Paragraph 32 provides for recovery of member share of contribution and as per the scheme, the employer can recover the employees share from the wages paid to the employee. Therefore, as per the PF Act and scheme of contributions, the contributions means and include both employees and employer s share. Similarly, section 2(c) of the Provident Fund Act defines the contribution to mean a contribution payable in respect of a member under the scheme or the contribution payable in respect of an employee to whom the scheme applies. There is a prescribed mode of payment of contribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r payment made before the due date of filing of Income Tax return cannot be ignored. Similarly, the ITAT, Hyderabad Tribunal in the case of Tetra Soft (India) Pvt. Ltd. Vs. ACIT (2015) 40 ITR (Trib) 470 held that when assessee remitted employees contribution to PF within due date of filing return of income u/s 139(1) of the Act, amount of employees contribution to PF cannot be disallowed. Similar view was upheld by the Chennai bench of the ITAT, in the case of ACIT Vs. Farida Shoes Pvt. Ltd. (2016) 46 CCH 29. The coordinate bench held that if assessee had not deposited employees contribution towards provident fund up to the due date as prescribed under relevant statute, but before due date of filing of return no disallowance could be made in view of the provisions of section 43B of the Act. In the case of CIT Vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 35 Taxman 616, the Hon ble High Court of Rajasthan, after referring to the apex court decision in the case of CIT Vs. Alom Extrusions Ltd. 319 ITR 306 CIT Vs. Vinay Cement Ltd. held that the deductions should be allowed for the payment of employees contribution made before the due date of filing of return. Similarly, in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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