TMI Blog2018 (3) TMI 1566X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. It was further held by the Tribunal that the interest accrued to the assessee on the contributions to such unrecognized PF was also liable for tax deduction u/s. 192. Thus we hold that the CIT(A) is justified in confirming the orders passed u/s. 201 and 201(1) of the I.T. Act. - Decided against assessee. - I.T.A. Nos. 231 & 232 /Coch/2016 - - - Dated:- 22-3-2018 - Shri Chandra Poojari , AM And George George K., JM Assessee by : Shri George Thomas, CA Revenue by : Shri M.V. Rudran, Addl. CIT, DR ORDER Per George George K., JM These appeals at the instance of the assessee are directed against the consolidated order of the CIT(A), Kozhikode dated 11/02/2016. The relevant assessment years are 2007-08 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee was deducting u/s. 80C of the Act, contributions to unrecognized Provident Fund. According to the Assessing Officer, the contributions to unrecognized Provident Fund were not eligible for deduction u/s. 80C of the Act. Further, the Assessing Officer held that interest accrued on employees contribution to unrecognized Provident fund is also taxable under the head Income from other sources . The Assessing Officer passed orders u/s. 201(1) and 201(1A) of the Act, making the assesse in default for the above two short deductions and making it liable for interest. 5. Aggrieved by the orders passed u/s. 201(1) and 201(1A) of the Act, the assessee filed appeals before the first appellate authority. The CIT(A), after an elaborate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Income Tax Officer(TDS) (supra) wherein it was held that the contribution to the PF Fund that was not recognized by the Chief Commissioner or Commissioner in accordance with the rules contained in the Part A of the Fourth Schedule or under a scheme framed under the Employees Provident Fund Act, 1952, is not entitled to deduction u/s. 80C of the Act. It was further held by the Tribunal that the interest accrued to the assessee on the contributions to such unrecognized PF was also liable for tax deduction u/s. 192 of the Act. The relevant finding of the Tribunal reads as follows: 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 contrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent Funds Act, 1952 (19 of 1952). 9.2 Admittedly, the assessees contributions to the Provident Fund are not recognized by the Chief Commissioner or Commissioner in accordance with the rules contained in the Part A of the Fourth Schedule. 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 e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. Act. 9.5 It is also to be noted that the assessees were not able to show that any of the employees of the assessee-society had filed returns and had paid tax correctly to the Government account. Therefore, the case laws relied on by the assessees 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 whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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