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TMI Blog2023 (5) TMI 1359X X X X Extracts X X X X X X X X Extracts X X X X ..... wance u/s. 36(1)(va) in order dated 22.08.2019 u/s. 143(1) of the Income-tax Act, 1961 [the Act] and confirmed by the CIT(Appeals). 3. The assessee is a partnership firm engaged in the business of food preparation and sweets etc. It filed return of income for AY 2018-19 declaring total income of Rs.1,04,89,720. The return was processed u/s. 143(1) of the Act determining total income of Rs.1,22,14,931, disallowing Rs.17,25,211 towards delay in payment of employees contribution to PF and ESI u/s. 36(1)(va) of the Act. 4. On appeal before the CIT(Appeals), the assessee submitted that out of Rs.17,25,211, a sum of Rs.15,55,547 was paid within the due date as per the EPF & ESI Acts and the balance of Rs.1,29,106/- was paid within the due date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 40,588 Deduction for the month Employee PF Contribution Due Date Date of Remittance Aug. 2017 58,406 15.09.2017 21.09.2017 Sept. 2017 70,700 15.10.2017 19.10.2017 Total 1,29,106 7. The assessee submitted that disallowance of the above amounts u/s. 36(1)(va) was a debatable issue and could not have been disallowed u/s. 143(1)(a) of the Act. The assessee placed reliance on various decisions of the High Courts and Tribunals. 8. However, the CIT(Appeals) dismissed the appeal of the assessee, against which the assessee is in appeal before the Tribunal. 9. The ld. AR reiterated the submissions made before the CIT(Appeals) and relied on the decision of Calcutta Bench of the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be given full and unfettered play. The explanation cannot curtail or restrict the main thrust or scope of the provision and due weightage as well as meaning has to be attributed to the purposes of section 143(1)(a) of the Act." 12. In view of the above judgment, the contention of the assessee that no disallowance could be made u/s. 143(1)(a) of the Act towards employees contribution to EPF and ESI is rejected. 13. It is submitted by the ld. AR that there was inadvertent error in Form 3CD in mentioning the correct dates and the relevant details to the extent of employees contribution to the extent of Rs.15,55,547 (14,97,770 + 57,777) have been already been reproduced in para 4 of this order. The assessee has produced copy of challans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s/salary is actually disbursed irrespective of month to which the same relates. Thus, the scheme of the Government in this regard is that once a deduction is made in respect of the employees' contribution to the provident fund from the salary/wages of the employee or the employer also makes his contribution, factually at the time of disbursement of the salary the payment in respect of such contribution should be made forthwith. if for some reason or other the payment of salary for a particular month be held up for considerable period of time it cannot be said that the employer would be liable to make payments in respect of the "employer's" as well as "employees" contribution in respect of wages for such period within a period of 15 days fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or filing return u/s. 139(1) of the Act, though they were belated payments under the respective Acts and hence no disallowance is called for. This issue is settled by the Hon'ble Supreme Court judgment in Checkmate Services (P.) Ltd. Vs CIT-1, [2022] 143 taxmann.com 178 (SC) wherein it is held that that Section 43B(b) does not cover employees' contributions to PF, ESI etc., deducted by employer from salaries of employees and that employees contribution has to be deposited within the due date u/s 36(1)(va) i.e. due dates under the relevant employee welfare legislation like PF Act, ESI Act etc. failing which the same would be treated as income in the hands of the employer u/s.2(24)(x). Respectfully following this judgment, we sustain the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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