TMI Blog2022 (9) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... ] wherein it was held that where assessee did not deposit employees' contribution to employees' account in relevant fund before due date prescribed in Explanation to section 36(1)(va), no deduction would be admissible even though he deposits same before due date under section 43B of the Act. Again the Gujarat High Court in the case of Pr. CIT v. Suzlon Energy Ltd. [ 2020 (2) TMI 792 - GUJARAT HIGH COURT] held that where assessee had not deposited employees' contributions towards PF and ESI amounting Rs. 15.20 lakhs within prescribed period in law and Assessing Officer by invoking provisions of section 36(1)(va) read with section 2(24)(x) made addition of aforesaid amount to income of assessee, impugned addition made to inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se additional ground of appeal. 3. The brief facts of the case are that the original assessment was completed on 10-12-2019. Thereafter, Principal CIT initiated proceedings u/s 263 of the Act on the ground that the assessee firm had claimed total provident fund expenses amounting to 89,63,667/-, including employee s contribution of provident fund of 42,40,977/-. The AO had not disallowed such expenditure while finalising the assessment. The Principal CIT further observed that the assessee had made payments toward employees provident fund after due date as prescribed in section 36(1)(va) of the Act of 15,62,050/-. The Ld. Assessing Officer has not disallowed the same while finalising the assessment and the AO has simply accepted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, the employee's contribution fund totaling of Rs.42,40,977/- is not an allowable expenditure as claimed by the assessee. The Assessee should not have claimed the employee's contribution of Provident Fund which is deducted from the salary of employees. The AO has not verified in this regard and not disallowed such expenditure while finalizing the assessment order. Therefore, to this extent the assessment order passed, by the 15G is erroneous in so far as prejudicial to the interest of the revenue. 5.2. On perusal of the submission filed by assessee in respect of Provident fund for F.Y. 2016-17 relevant to A-Y 2017-18, copy of challan of PF and bank statement, it is noticed that the assessee firm has made payments towards th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meaning of the provisions of section 263 of the Act. On reading of section 2(24)(x), it is categorical and clear that the contribution received by the assessee from the employee alone was treated as income for the purpose of section 36(1)(va) and therefore, the assessee is entitled to get deduction for the sum received by the assessee towards contribution to the fund or funds so mentioned was credited by the assessee on or before the due date to the in the relevant fund as provided under Explanation to section 36(1)(va) of the Act. Vide order No. WSU/9(l)2013 setttlement dated 08. 01.2016 of Employees Provident Fund Organization, grace period of 5 days has been removed w.e.f. Contribution for month of January, 2016. Further, as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on following judicial decisions wherein the action u/s. 263 were upheld in the circumstances when the assessments were completed without conducting proper inquiries. a. CJT v. Pushpa Devi [1987] 164 ITR 639 [l988] 29 Taxman 377 (Pat). b. CIT v. Seshasayee Paper Boards Ltd. [2000] 242 ITR 490/108 Taxman 464 (Mad.). c. CIT, Patiala v. Hirnachal Pradesh Financial Corpn. [2010] 186 Taxman 186(HP). d. CIT. Dehradun v. Sunil Goyal [2005)] 176 Taxman 184 (Uttarakhand). e. CJT v. Modi Brother [2007] 164 Taxman 331 (MP). f Mammlal Matadeen v. C!T[2006] 152 Taxman 125 (all.). g. CJT v. Bhagwan Das [2005] 142 Taxman 1 (All). h. Gee Fee Enterprises v. Addl. OT[1975] 99 ITR 375 (Delhi). L CJT Vs. Amita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irm towards the Provident Fund after due date as prescribed in section36(1)(va) of the I,T. Act, 1981. 8. I, therefore, hold that the assessment order dated 10.12.2019 finalized by the Assessing Officer u/s. 143(3) of the Income-tax Act, 1961 is erroneous and prejudicial to the interests of revenue within the meaning of section 263 of the Income-tax Act, 1961 and hence the order passed by the Assessing Officer u/s. 143(3) dated 10.12.2019 is hereby aside to the above extent of observations at Para-5. The Assessing Officer is directed to reframe the assessment afresh after properly verifying the above aspects and after giving the assessee a reasonable opportunity of being heard. 4. Before us, the counsel of the assessee reiterate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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