TMI Blog2022 (1) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... liability to pay tax, cess and interest demanded thereon. 2. That having regard to the fact and circumstances of the case the addition of ₹ 1,34,148/- sustained by the honourable CIT(A) u/s 36(1)(va) relating to late deposit of PF/ESIC is bad in law and deserves to be deleted. 3. That having regard to the facts and circumstances of the case, CPC has erred in law and on facts in charging interest u/s 234A, 234B and 234C of the Income Tax Act, 1961. 4. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other. 2. No one appeared on behalf of the assessee at the time of hearing. The notice sent through speed post was returned with remark left . The assessee has not provided any new address to the Registry. Therefore, the appeal was taken up for hearing in the absence of assessee. 3. The only effective ground in this appeal is against the sustaining of addition of ₹ 1,34,148/- made u/s 36(1)(va) of the Act relating to late deposit of PF ESI. 4. Facts giving rise to the present appeal are that the present electronically fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Definitions. 2. In this Act, unless the context otherwise requires,- *** *** (24) Income IncludesPage *** * '* (xl any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees ;] ,. Other deductions. 36. (1) The deduction provided for In the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- *** [(va) 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.-For the purposes of this clause, due data means the dote 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 thereunde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the assessee would be entitled for deductions quo the sum received from any office employee to Which provisions under subsection (x) of clause (24) of section 2 is applied only, if such sum is credited by the assessee to the employees account in the relevant fund or funds on or before the due date. Due date is further defined in the Explanation, which means, the date by which the assessee is required as an employer to credit employees contribution to the employees account in the relevant fund under any Act or rule or order or notification issued thereunder or any standing order or award or service or otherwise. Meaning thereby, in case, employer fails to deposit the entire amount towards employees contribution on account of PF ESI with concerned department on or before the due date under PF ESI, the assessee shall be entitled for deduction to that extent. 10. Decision of the Hon'ble Supreme Court relied upon by the assessee cited as CIT vs. Alom Extrusions Ltd. (supra) is not applicable to the facts and circumstances of the case because Hon'ble Supreme Court has decided the issue in Alom Extrusions Ltd. case quo employers contribution as per section 43B(b) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO based on the entire amounts that were disallowed. The ITAT however granted complete relief. 8. Having regard to tile specific provisions of the Employees' Provident Funds Act and ESI Act as well 05 the concerned notifications which granted a grace period of 5 days (which appears to have been late withdrawn recently on 08.01.2016), we are a/the opinion that the ITAT s decision in this case was not correct The assessee undoubtedly was entitled to claim the benefit and properly treat such amounts as having been duly deposited, Which were in fact deposited within the period prescribed (I.e. 15 + 5 days In the case of EPF and 21 days + any other grace,. period in terms of the extent notification). As far as the amounts constituting deductions from employees' salaries towards their contributions, which were made beyond such stipulated period, obviously the assessee was not entitled to claim the deduction from its returns. 9. In view of this discussion, the Revenue's appeal is partly allowed. The AO is directed to examine the contributions made with reference to the dates when they were actually made and grant relief to such of them which qualified for such reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Supreme Court in Vinay Cement (supra). 10. Further, Hon ble Delhi High Court in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. in ITA No.983/2018 [Del.] order dated 10.09.2018 held as under:- In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (2010) 321 ITR 508 (Del.) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee s Provident Fund (EPD) and Employee s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act. Therefore, respectfully following the ratio laid down by the Hon ble Jurisdictional High Court in the above-mentioned binding precedents, I hereby direct the Assessing Officer to delete the disallowance. Thus, ground raised by the assessee is allowed. 11. In the result, the appeal of the assessee is allowed. Order pronounced i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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