TMI Blog2017 (3) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act, 1952. Assessee also does not have case that its PF is established under a scheme framed under the Employees Provident Fund Act, 1952 (19 of 1952). That being the case, admittedly, the assessees’ contributions to the Provident Fund are not recognized Provident Fund u/s. 2(38) of the Act and the contributions are not entitled to deduction u/s. 80C (2)(vi) of the I.T. Act. If the contributions are not eligible for deduction u/s. 80C of the Act, there are resultant short deductions of tax u/s. 192 of the Act. Consequently, the interest accrued on the Provident Fund is also liable to be taxed as ‘Income from other sources’. Section 192(1) of the Income Tax Act makes abundantly clear that the employees are bound to deduct tax at source ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These are appeals of two assessees against two orders of the CIT(A), Kozhikode both dated 22/04/2016. The relevant assessment years are 2007-08 and 2008-09. The orders of the CIT(A) arise out of the orders passed u/s. 201(1) and 201(1A) of the I.T. Act. 2. Since common issues are involved in these appeals, they were heard together and are being disposed of in this consolidated order. 3. Identical several grounds are raised in these appeals. All the grounds relate to the issue whether the orders passed u/s. 201(1) and 201(1A) are valid or not? 4. The brief facts of the case are as follows: For the assessment years 2007-08 and 2008-09, the Assessing Officer noticed that the assessees while making TDS on salaries u/s. 192 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 201(1) and 201(1A) of the Act cannot have application. 8. On the other hand, the Ld. DR submitted that the Assistant Commissioner of Provident Fund, Kannur had categorically stated that the contributions made by the assessees to the Provident fund are not established under a scheme framed under the Employees Provident Funds Act, 1952 (19 of 1952). 9. I have heard the rival contentions and perused the material on record. The assessees while making TDS on salaries u/s. 192 of the Act had claimed contributions to the Provident Fund as eligible deduction u/s. 80C (2) (vi) of the Act. The Assessing Officer held that the contributions to Provident Fund are not recognized u/s. 2(38) of the Act and were not eligible for deduction u/s. 80C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dule. It is to be further examined whether the Provident Fund is established under a scheme framed under the Employees Provident Fund Act, 1952 (19 of 1952) or not. 9.3 In the instant case, the Assistant Commissioner of Provident Fund vide his letter dated 14/02/2017 (which is placed on record) very categorically states that the Provident Fund of the assessees is not established as per the scheme framed under the Employees Provident Funds Act, 1952. Assessee also does not have case that its PF is established under a scheme framed under the Employees Provident Fund Act, 1952 (19 of 1952). That being the case, admittedly, the assessees contributions to the Provident Fund are not recognized Provident Fund u/s. 2(38) of the Act and the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essees cannot come to their aid. 9.6 Further, the order passed by the Delhi Bench of the Tribunal in the case of DCIT vs. HCL Infosystems Ltd. (supra) relied on by the assessees is of no help since in the instant case it cannot be stated that assessee s estimation is bonafide or honest estimation of salary income of its employees. Admittedly, the contributions made by the assessees to the Provident Fund were not a recognized Fund and were not eligible for deduction u/s. 80C of the Act which had resulted in short deductions of tax. For the above said reasons, I reject the contentions raised by the assessees and dismiss the appeals of the assessees. It is ordered accordingly. 10. In the result, the appeals of the assessees are dismissed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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