TMI Blog2021 (9) TMI 182X X X X Extracts X X X X X X X X Extracts X X X X ..... employees contribution to ESI and PF - assessee submitted as deposited the employees contribution to ESI and PF belatedly but before due date of filing the return of income u/s.139(1) - scope of amended provisions of Section 43B as well as 36(1)(va) - HELD THAT:- As the amended provisions of Section 43B as well as 36(1)(va) are not applicable for the assessment year under consideration. By following the binding decision of Hon ble Jurisdictional High Court of AIMIL LIMITED, NIRMALA SWAMI, SPEARHEAD DIGITAL STUDIO, M/S. NET 4 INDIA LTD., MODIPON LTD., M/S. EKTA AGRO INDUSTRIES LTD., [ 2009 (12) TMI 38 - DELHI HIGH COURT] the employees contribution paid by the assessee before the due date of filing of return of income u/s.139(1) is an allowable deduction. Accordingly, we decide this issue in favour of the assessee - I.T.A. No.622/DEL/2018 - - - Dated:- 27-8-2021 - Shri R.K. Panda, Accountant Member And Shri Vijay Pal Rao, Judicial Member For the Appellant : Shri Brij Kishor Anand, C.A. For the Respondent : Ms. Anima Barnwal, Sr.D.R. ORDER PER VIJAY PAL RAO, J.M. This appeal by the Revenue is directed against the order dated 28.11.2017 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... control of the assessee to get the mistake rectified in 26AS but it was sole responsibility of the Tata Consulting Engineers Ltd. to rectify the mistake by filing correct TDS statements. Thus, he has contended that the Assessing Officer has made the addition without conducting any enquiry from other party to get the facts verified and CIT(A) has confirmed the said addition even without asking the Assessing Officer to verify the facts through remand proceedings. Hence, the ld. AR has pleaded that once the assessee has explained that this amount is wrongly shown in the PAN of the assessee by the Tata Consulting Engineers Ltd. then the same cannot be treated as income of the assessee. 4. On the other hand, the ld. DR has submitted that the assessee is having various transactions with Tata Consulting Engineers Ltd. The other transactions except these two transactions are not disputed by the assessee, therefore, the onus is on the assessee to reconcile the difference and produce the correct gross receipt confirmation from the other party. She has relied upon the order of the authorities below. 5. We have considered the rival submissions as well as relevant material on record. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F 15-Jan-2014 580586.00 58059.00 58059.00 From this, it is apparent that this party has shown the transactions totaling ₹ 18,37,922/- on which the tax of ₹ 1,83,793/- was deducted and deposited in the government account. Now the appellant claims that the bills of ₹ 4, 62,280/- and ₹ 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 deducting TDS and TDS was also deposited in the Government account, unless this 26AS is revised by the said party the difference of 26AS is not reconciled by the appellant. The onus is on the appellant to prove that such difference has occurred by wrong entry made by Tata Consulting Engineers Ltd. No confirmation of the party Tata Consulting Engineers Ltd. or any revised 26AS till the date could be filed by the appellant during the course of appellate proceedings. The only evidence in support of the claim was an e-mail sent by the appellant to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction and not upto due date of filing of return. The Assessing Officer accordingly disallowed sum of ₹ 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 CIT vs. Aimil Ltd. as reported in (2009) 321 ITR 508 (Delhi) . 10. On the other hand, ld. DR has submitted that there are decisions in favour of the Revenue wherein the Hon ble High Courts have held that the amendment by Finance Act, 2015 in Section 43B is restricted only in respect of employer s contribution to PF and ESI and if the same is paid on or before the due date of filing of income u/s. 139(1), the same is allowable u/s.43B of the Income Tax Act. However, the said amendment would n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments 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 Section 43B, read with Section 36(1)(va) of the Act? (b) Whether the deletion of the 2nd proviso to Section 43B by way of amendment by the Finance Act, 2003 is retrospective in nature? 16. These questions were answered by the Division Bench in the following manner :- 7. Having heard the learned counsel for the Revenue, as well as, the assessee, we are of the view that the view taken by the Tribunal deserves to be sustained as it is no longer res integr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs 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 amendment brought about in Section 43B of the Act. The aforesaid position as regards the state of the law for a period prior to the amendment to Section 43B has been noticed by a Division Bench of this Court in Dharmendra Sharma (supra). Applying the ratio of the decision of the Supreme Court in Vinay Cement (supra) a Division Bench of this Court dismissed the appeals of the Revenue. In the passing we may also note that a Division Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 the Provident Fund Act as well as the ESI Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. Insofar as the Income Tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement (supra). 19. We, thus, answer the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 employee's account in the relevant fund under any Act, rule, order or notification issued there-under or under any standing order, award, contract of service or otherwise. Section 43B specifies the list of deductions that are admissible under the Act only upon their actual payment. Employer's contribution is covered in clause (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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