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TMI Blog2024 (6) TMI 1401X X X X Extracts X X X X X X X X Extracts X X X X ..... loyees provident fund scheme 1952, payment of contribution of employees share should be made within 15 days from the end of the month during which disbursement of salary. 77,56,571/- 4. Without prejudice, the impugned additions are excessively arbitrary and unreasonable and liable to be deleted in full. Gen 5. For these and such other grounds that may be urged at the time of hearing the appellant prays that the appeal may be allowed. Gen Total tax effect (see note below) 77,56,571/- 3. The brief facts of the case are that the assessee is running the business of manpower agency services under the name and style of "Southern Supplies and Smart Services" at Bengaluru. The assessee had filed his return of income for the Assessment Year 2019-20 on 31.10.2019 vide Acknowledgment No. 237577321311019 declaring total income of Rs.43,19,270/-. Thereafter, the intimation u/s. 143(1) of the I.Tax Act vide DIN No. CPC/1920/A3/1973740824 dated 15.05.2020 was served on the assessee by disallowing Rs.77,56,571/- on the ground that the employees contribution of PF and employees contribution of ESI were not deposited in time as prescribed under the respective Act based on the observation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Whereas before us the Ld AR argued that the amount of Employee's share to ESI & PF was paid within the due date as per EPF & ESI Act since as per clause 38 of Employees provident fund scheme 1952, the payment of contribution of employee's share should be made within 15 days from the end of the month during which disbursement of Salary. 6. We have heard the rival submissions and perused the material available on record. 7. The Ground No. 1, 4 & 5 are general in nature & does not require any adjudication. 8. With regard to Ground No. 2 & 3 of the Assessee that the amount of Employee's share to ESI & PF was paid within the due date as per EPF & ESI Act since as per clause 38 of the Employees Provident fund Scheme 1952, payment of contribution of employee's share should be made within 15 days from the end of the month during which disbursement of Salary is made, we are of the opinion that under the similar facts & circumstances, the issue involved in the present case has been decided by this Tribunal in the case of Manikandan Vazhukkapara Kumaran in ITA No.577/Bang/2023 dated 29/11/2023 for the Asst. year 2018-19. 9. The relevant observation/extracts are reproduced below- "10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contribution within 15 days of the close of the month must be to the month in which the salary payment is made. He submitted that the entire additional evidence filed before this Tribunal establishes that there is a delay in paying salary to the employees and therefore, if that is taken into consideration, there cannot be any delay that would be attributable towards the deposit of employees' contribution to the relevant fund. He also submitted only a minor amount would fall within the purview of disallowance u/s 36(1)(va) of the Act. The ld. A.R. thus prayed that the additional evidence filed by assessee may be admitted and the issue may be remanded to the ld. AO for necessary verification based on such additional evidences. 10.5 At the request of the ld. A.R., we had directed the ld. D.R. to carry out necessary verifications and sufficient time was granted to the ld. D.R. in order to respond to the additional evidence filed by assessee. 10.6 The ld. D.R. after going through the entire additional evidences submitted that, apparently the dates have been shifted and therefore, there is delay only in respect of few contributions. However, the ld. D.R. submitted that had this t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r requires that the employer shall within 15 days of the close of every month pay the same to such fund along with administrative charges. It is thus; clear that after deducting the employees' contribution towards the fund the same has to be deposited with the Government within 15 days of the close of every month. In our opinion, reference to 15 days of the close of every month has to be in relation to the month during which the payment of wages is to be made and the corresponding liability to deduct employees' contribution to such fund immediately arises. Further, the expression "within 15 days of the close of every month", therefore, must be interpreted as having reference to the close of the month for which the wages are required to be paid with corresponding date to deduct employees' contribution and to deposit the same with the relevant fund. 10.9 On perusal of section 38 of the Employees Provident Fund & Miscellaneous Provisions Act, 1952, the phrase used in respect of the wages that an employer is supposed to pay to an employee for any period or part of period, are represented as, contributions that are "payable". This means, the legislature is very clear in its intent th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We, therefore, do not find any merit in the new argument raised by the assessee in additional ground No.2 requesting to remand the issue back to the Ld. AO to verify the claim of disallowance in the light of the additional evidences filed by assessee. We, therefore, dismiss additional ground No.2 raised the assessee, as such argument is not in consonance with the provisions of Section 38 under Employees Provident Fund and Miscellaneous Provisions Act, 1952. Accordingly, the additional ground nos. 2-3 raised by assessees stands dismissed in all the appeals. 10.15 In the main ground No.2, the assessee has commonly raised the following issue, which has been reproduced from ITA No.578/Bang/2023. "2. Grounds relating to disallowance of employee contribution to provident fund 2.1. The learned CIT(A), NFAC, Delhi erred in confirming the disallowance of employee contribution to provident fund amounting to Rs.77,17,455 in computing the business income of the appellant under Chapter IVD of the Income tax Act, 1961. 2.2. The learned CIT(A), NFAC, Delhi erred in not appreciating that the employee contribution to provident fund amounting to Rs. 77,17,455 was paid within the due d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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