Appeal success: Disallowance overturned under Income Tax Act

The appeal involved the disallowance of an amount under section 43B of the Income Tax Act for the assessment year 2005-06. The disallowance was initially upheld by the CIT(A) but was later overturned by the Tribunal. The Tribunal ruled that since the contributions towards the provident fund were deposited before the due date of filing the return, the disallowance was unjustified. The appeal was allowed in favor of the assessee, with no costs awarded, and the decision was made on 18th September 2009.

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Issues involved: Disallowance u/s.43B of the IT Act for AY 2005-06.

Summary:
The appeal pertains to the disallowance of &8377; 2,72,501 made u/s.43B of the IT Act for AY 2005-06. The Assessing Officer disallowed the amount as the employees' contribution to the provident fund was deposited after the due date specified in sec.36(1)(va). This disallowance was upheld by the CIT(A), leading to the current appeal.

During the hearing, the assessee's counsel referred to a Tribunal order in another case where it was held that contributions towards PF made before the due date of filing the return u/s.139(1) should not be disallowed. In the present case, it was established that the amounts deducted from employees' salaries were deposited with the Government before the due date of filing the return, which was 30-10-2005. Relying on the precedent set by the Tribunal order, the disallowance u/s.43B was deleted, and the appeal of the assessee was allowed.

The Tribunal concluded that there was no need to refer the matter back to the Assessing Officer for further verification, as the contributions were made before the due date of filing the return. Following the precedent set by a co-ordinate bench, the disallowance was overturned, and the appeal was allowed with no order as to costs. The order was pronounced in the open court on 18th September 2009.

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