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TMI Blog2021 (9) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... an addition of Rs. 8,20,480 on basis of TDS amounts appearing in Form 26AS. (2) That the learned CIT(Appeals) erred in confirming the disallowance of Rs. 1,16,779 out of Rs. 1,70,120 being late deposit of Employees share towards Provident Fund & ESI Contribution notwithstanding that the amounts had been deposited before the due date of filing the tax return." 2. Ground No.1 is regarding addition made by the Assessing Officer on account of difference of the gross receipts shown in the 26AS in comparison to the return of income filed by the assessee. During the assessment proceedings, the AO noted that assessee has not declared the income to the tune of Rs. 8,20,480/- received from Tata Consulting Engineers Ltd. [TCE] as appearing in 26AS. The Assessing Officer accordingly added the said amount in the income of the assessee. On appeal the assessee contended that the said amount of Rs. 8,20,480/- does not pertain to any of the bill issued by the assessee but the amount was wrongly shown in the account of the assessee. However, the CIT(A) has confirmed the addition made by the Assessing Officer on the ground that the assessee has failed to reconcile the difference of the gross recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tata Consulting Engineers Ltd. has shown the following:- Name of Deductor TAN of Deductor Total Amount Paid/Credited Total Tax Deducted Total TDS Deposited TATA CONSULITNG ENGINEERS LIMITED MUMT06 732F 1837922.00 183793.00 183793.00 s.n. Section Transaction Date Status of Booking Date of Booking Remarks Amount paid/Credited Tax Deducted TDS Deposited 1 194J 31-Mar-2014 F 20-May-2014 " 462280.00 46228.00 46228.00 2 194J 31-Mar-2014 F 20-May-2014 " 358200.00 35820.00 35820.00 3 194J 31-Dec- 2013 F 15-Jan-2014 436856.00 43686.00 43686.00 4 194J 31-Dec- 2013 F 15-Jan-2014 " 580586.00 58059.00 58059.00 From this, it is apparent that this party has shown the transactions totaling Rs. 18,37,922/- on which the tax of Rs. 1,83,793/- was deducted and deposited in the government account. Now the appellant claims that the bills of Rs. 4, 62,280/- and Rs. 36, 58,200/- are not raised by the appellant. This dispute, the appellant has to settle with the party Tata Consulting Engineers Ltd. As the third party is showing specific transaction date with specific date of deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 is regarding disallowance made by the AO in respect of delay for depositing the employees contribution to ESI and PF. The assessee has deposited the employees contribution to ESI and PF belatedly but before due date of filing the return of income u/s. 139(1) of the Act. The AO relied upon the CBDT Circular No.22/2015 as well as Section 36(1)(va) read with Section 2(24)(x) of the Income Tax Act and held that the contribution to PF and ESI is upto the due date provided in the respective statement is allowable deduction and not upto due date of filing of return. The Assessing Officer accordingly disallowed sum of Rs. 1,70,120/-. 8. On appeal, the ld. CIT(A) has confirmed the disallowance made by the Assessing Officer. 9. Before us, the ld. AR of the assessee has submitted that there are binding precedents on this issue wherein the Hon'ble High Court as well as the Hon'ble Supreme Court has held that the payment of employees contribution regarding PF and ESI before the due date of filing of return of income u/s.139(1) is an allowable claim as per the provision of Section 43B of the Income Tax Act. He has relied upon the decision of Hon'ble Jurisdictional High Court in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, the Hon'ble High Courts have considered this issue and given the benefit of Section 43B even in case of employees contribution which was paid by the assessee on or before due date of filing of return of income u/s.139(1) of the Act. In the case of CIT vs. Aimil Limited (supra), the Hon'ble Jurisdictional High Court has again considered this issue and held in paragraphs 14 to 19 as under: "14. When we keep that proposition in mind and also take into consideration various judgments where Vinay Cement (supra) is applied and followed, it will not be possible to accept the contention of the Revenue. 15. In CIT v. Dharmendra Sharma, 297 ITR 320, this Court specifically dealt with this issue and relying upon the aforesaid judgment of the Guwahati High Court, as affirmed by the Supreme Court in Vinay Cement (supra), the appeal of the Revenue was dismissed. More detailed discussion is contained in another judgment of this Court in CIT v. P.M. Electronics Ltd. (ITA No. 475/2007 decided on 3.11.2008). Specific questions of law which were proposed by the Revenue in that case were as under :- "(a) Whether amounts paid on account of PF/ESI after due date are allowable in view of Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 412 and General Finance Co. v. Asst. CIT: (2002) 257 ITR 338 (SC) . The said submissions found favour with the Division Bench of the Guahati High Court and relying on earlier decisions of its own Court in CIT v. Assam Tribune: (2002) 253 ITR 93 and CIT v. Bharat Bamboo and Tiber Suppliers: (1996) 219 ITR 212 the Division Bench dismissed the appeal of the Revenue. It transpires that the aforesaid matter was taken up in appeal alongwith other matters including Vinay Cement (supra). The order in Vinay Cement (supra) was passed by the Supreme Court on 7.3.2007 wherein it observed as follows:- "Delay condoned. In the present case we are concerned with the law as it stood prior to the amendment of Section 43-B. In the circumstances, the assessee was entitled to claim the benefit in Section 43-B for that period particularly in view of the fact that he has contributed to provident fund before filing of the return. Special Leave Petition is dismissed." 10. In view of the above, it is quite evident that the special leave petition was dismissed by a speaking order and while doing so the Supreme Court had noticed the fact that the matter in appeal before it pertain to a period prior to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was non declared by the Supreme Court under Article 141 of the Constitution. 12. We are in respectful agreement with the reasoning of the Madras High Court in Nexus Computer Pvt Ltd (supra). Judicial discipline requires us to follow the view of the Supreme Court in Vinay Cement (supra) as also the view of the Division Bench of this Court in Dharmendra Sharma (supra). 13. In these circumstances, we respectfully disagree with the approach adopted by a Division Bench of the Bombay High Court in M/s Pamwi Tissues Ltd (supra). 14. In these circumstances indicated above, we are of the opinion that no substantial question of law arises for our consideration in the present appeal. The appeal is, thus, dismissed." 17. It also becomes clear that deletion of the 2nd proviso is treated as retrospective in nature and would not apply at all. The case is to be governed with the application of the 1st proviso. 18. We may only add that if the employees‟ contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt by employer of employee contribution to a fund on or before due date Clause (24) of section 2 of the Act provides an inclusive definition of the income. Sub-clause (x) to the said clause provide that income to include any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees." Section 36 of the Act pertains to the other deductions. Sub-section (1) of the said section provides for various deductions allowed while computing the income under the head "Profits and gains of business or profession'. Clause (va) of the said sub-section provides for deduction of 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. Explanation to the said clause provides that, for the purposes of this clause, "due date" to mean the date by which the assessee is required as an employer to credit an employee's contribution to the emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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