TMI Blog2019 (11) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction for same shall be allowed. As in the case of Carat Lane Trading Pvt. Ltd. [ 2017 (12) TMI 1669 - ITAT CHENNAI] we decide this issue in favour of the assessee and hold that employees contribution towards PF and ESI deducted by assessee from salaries of employees which is deposited by assessee beyond the due date prescribed under relevant statutes governing PF and ESI, but deposited prior to due date of filing of return of income u/s.139(1) of the 1961 Act shall be allowed as deduction and we direct deletion of the additions made to the income of the assessee. The assessee succeeds in its appeal filed with tribunal. - Decided in favour of assessee. - ITA No.693/Chny/2017 - - - Dated:- 25-11-2019 - Shri N.R.S. Ganesan, Judicial Member And Shri Ramit Kochar, Accountant Member For the Appellant : Mr.N.Arjunraj , Adv. For the Respondent : Ms.R.Anitha, JCIT ORDER PER RAMIT KOCHAR, ACCOUNTANT MEMBER: This appeal filed by assessee is directed against appellate Order dated 30.12.2016 passed by learned Commissioner of Income Tax (Appeals)-1, Coimbatore (hereinafter called the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution is also the legal obligation of the employer. This could be confirmed by the fact that after clause (b) a provision was added to regarding the necessity on the part of the employees to adhere to the due dates prescribed under Section 36 (1)(va) of the Act. Hence, the learned C.l.T. (Appeals) is not correct in concluding that the obligations referred to in Section 36 (1)(va) or the Explanation to this Section is not to be considered under Sec. 43B. 7. The C.l.T.(Appeals) ought to have noted that after deletion of the above cited requirement in the provisions of Section 43B, the Appellant Company would be eligible to claim deduction of the amount of Employees contributions to P.F. and E.S.I, before the due date for filing the Return of Income under Section 139(1). 8. The learned C.l.T.(Appeals) is not justified in taking a stand that the decision of the Supreme Court in the case of C.l.T. Vs Alom Extrusions (319 ITR 306) does not deal with Employees contribution which are covered under Sec. 36 (1)( a) but only deals with the retrospective amendment of Section 43B and hence the decision of the Supreme Court cannot be applied in case of P.F. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited late beyond the due date prescribed under relevant statutes governing PF and ESI for deposit of said PF and ESI contribution, which in the opinion of Revenue has infringed provisions of Section 36(1)(va) of the 1961 Act, therefore as per Revenue said sum is liable to be assessed as income in the hands of assessee by invoking provisions of Section 2(24)(x) r.w.s. 36(1)(va) of the 1961 Act. It is admitted position between rival parties that an aggregate amount of ₹ 33,32,061/- was deducted by assessee on account of employees contribution towards PF and ESI from salaries of employees during previous year relevant to impugned ay , and the said amount was deposited by assessee beyond due date prescribed for deposit of PF and ESI under the relevant statutes governing PF and ESI , but however admittedly the said amount of ₹ 33,32,066/- was deposited by assessee before the due date prescribed for filing of return of income u/s 139(1) of the 1961 Act. The assessee contended before AO that as per provisions of Section 43B of the 1961 Act, since said amount was paid before the due date prescribed for filing of return of income u/s 139(1) of the 1961 Act, the said amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent dated 24.07.2015, for ay: 2003-04 and 2004-05 . The reliance was also placed by learned counsel for the assessee on decision of coordinate Bench of Chennai-tribunal in the case of ACIT v. Carat Lane Trading Private Limited reported in (2018) 89 taxmann.com 434(Chennaitrib.) for ay: 2012-13 , to which one of us being Hon ble Judicial Member was part of the Division Bench of Chennai-tribunal which pronounced the said order. the Ld.DR, on the other hand, supported appellate order passed by learned CIT(A). 6. We have considered rival contentions and perused the material on record. We have observed that assessee is in the business of wholesale and retail trading of gold covering jewellery. We have observed that assessee had deducted PF ESI share of employees contribution from salaries of employees to the tune of ₹33,32,061/- in aggregate during the year under consideration, which admittedly was deposited late by assessee beyond due date prescribed for deposit of PF/ESI under relevant statutes governing PF ESI, but admittedly said amounts of employees contribution towards PF/ESI deducted by assessee from employees salaries were deposited by assessee before du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by various High Courts following the decision of the Hon'ble Supreme Court in the case of CIT Vs. Alom Extrusions Ltd. (319 ITR 306), wherein the Hon'ble Supreme Court held that omission of second proviso to section 43B and amendment of first proviso by Finance Act, 2003 are curative in nature and are effective retrospectively and thus with effect from 1.4.1988 i.e. the date of insertion of first proviso. The co-ordinate Bench of this Tribunal considering a similar issue in the case of M/s.Venkateswara Electrical Industries P. Ltd. Vs. DCIT (supra) following the decision of Hon'ble Delhi High Court in the case of CIT Vs. Amil Ltd. (321 ITR 508) held that even the employees contribution to provident fund is to be allowed as deduction if it is paid within due date for filing of return. While holding so, the Tribunal observed as under:- 6. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below, as well as the judgments/decisions relied on by the ld. Counsel for the assessee. It is an undisputed fact that there has been delay in remittance of employees contribution o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 43B as amended by Finance Act, 2003. 6. In the present case, the assessee had remitted the employees contribution beyond the due date for payment, but within the due date for filing the return of income. Hence, following the above-said decisions, we find no reason to differ with the findings of the Tribunal. Accordingly, we find no question of law much less any substantial question of law arises for consideration in these appeals. Accordingly, both the Tax Case (Appeals) stand dismissed. No costs. Consequently, M.P.No.1 of 2015 is also dismissed. For sake of completeness , we would like to refer to decision in writ petition taken by single judge of Hon ble Madras High Court in the case of Unifac Management Services ( India) Private Limited v. DCIT in WMP No. 6461 of 2018, while judgment dated 23.10.2018( reported in (2018) 409 ITR 225(Mad.), wherein a contrary view is taken by single judge of Hon ble Madras High Court. This issue is not free from controversy as it is observed that different High Courts across India have taken a different view on this issue. We have also observed that Chennai-tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 8.1 The Revenue's relevant grounds of appeal are as under: 4. The learned CIT(A) has erred in deleting the addition made in respect of employees contribution towards PF ESI of ₹ 7,83,910/- which was remitted beyond the prescribed due dates 4.1 The learned CIT(A) erred in deleting the addition made in respect of delayed remittance of its employees contribution of Provident Fund despite the fact that Circular No.22/2015 dated 17.12.2015 clearly applies to claim of deduction relating employers' contribution and not for employees contribution to welfare funds. 4.2 The learned CIT(A) failed to appreciate that any received sum received on account of employees' contribution to Provident Fund ESI not remitted within the due date is to be treated as the income of the assessee and taxed in his hands as per provisions of Sec.2(24)(x) of the LT. Act, 1961. 8.2 The DR assailed the order of the CIT(A) based on the assessment order and on the above grounds of appeal. Per contra, the AR submitted that the return was filed on 28.09.2012 and the remittances were made before the due date o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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