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TMI Blog2022 (12) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") dated 28.05.2018. 2. Shri H. P. Bhardwaj, AR appeared on behalf of the assessee. Shri Vijay Kumar, Addl., CIT, Sr. DR appeared on behalf of the revenue. 3. Grounds raised by the assessee are reproduced as under: "1. That on the fact and circumstances of the case Ld. CIT(A) had erred both in law and on facts by confirming the order of the Assessing officer and making an addition of Rs.1,41,02,575/- being delay deposit of employees contribution to P.F and ESI u/s. 36(i)(vi) of the Income Tax Act, 1961 despite assessee contributing/depositing the same before the due date of filing of return of income u/s. 139(1) of the Act. 2. That the assessee craves leave to add, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e form of deductions, or otherwise, as receipts, were to be treated as income. The inclusion of a class of receipt, i.e., amounts received (or deducted from the employees) were to be part of the employer/assessee's income. Since these amounts were not receipts that belonged to the assessee, but were held by it, as trustees, as it were, Section 36(1)(va) was inserted specifically to ensure that if these receipts were deposited in the EPF/ESI accounts of the employees concerned, they could be treated as deductions. Section 36(1)(va) was hedged with the condition that the amounts/receipts had to be deposited by the employer, with the EPF/ESI, on or before the due date. The last expression "due date" was dealt with in the explanation as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... butions. There was a statutory classification, under the IT Act, between the two. * There is no doubt that in Alom Extrusions, this court did consider the impact of deletion of second proviso to Section 43B, which mandated that unless the amount of employers' contribution was deposited with the authorities, the deduction otherwise permissible in law, would not be available. This court was of the opinion that the omission was curative, and that as long as the employer deposited the dues, before filing the return of income tax, the deduction was available. A reading of the judgment in Alom Extrusions, would reveal that this court, did not consider Sections 2(24)(x) and 36(1)(va). Furthermore, the separate provisions in Section 36(1) fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tc. were treated as income in the hands of the employer. The significance of this provision is that on the one hand it brought into the fold of "income" amounts that were receipts or deductions from employees income; at the time, payment within the prescribed time - by way of contribution of the employees' share to their credit with the relevant fund is to be treated as deduction (Section 36(1)(va)). The other important feature is that this distinction between the employers' contribution (Section 36(1)(iv)) and employees' contribution required to be deposited by the employer (Section 36(1)(va)) was maintained - and continues to be maintained. On the other hand, Section 43B covers all deductions that are permissible as expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istinction has to be borne while interpreting the obligation of every assessee under Section 43B. * The non-obstante clause in section 43B would not in any manner dilute or override the employer's obligation under section 36(1)(va) to deposit the amounts retained by it or deducted by it from the employee's income, unless the condition that it is deposited on or before the due date, is correct and justified. The non-obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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