Tribunal upholds disallowance of employees' PF & ESIC contributions for late credit, denying deduction.

The Appellate Tribunal upheld the decision of the CIT(A) to disallow employees' contributions to Provident Fund and ESIC due to the failure to credit the sums within the prescribed due dates. The Tribunal affirmed that the assessee would not be entitled to deduction if the contributions were not credited by the specified deadlines, in line with the decision of the jurisdictional High Court. Consequently, the appeal was dismissed, confirming the disallowance of employees' contributions to PF and ESIC for the Assessment Year 2014-15.

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Issues:
1. Disallowance of employees' contribution to Provident Fund and ESIC.

Analysis:
The appeal before the Appellate Tribunal ITAT Ahmedabad pertained to the disallowance made by the assessing officer regarding the employees' contribution to Provident Fund (PF) and ESIC for the Assessment Year 2014-15. The assessee contended that the contributions were made before the due date for filing the income tax return under section 139(1) of the Income Tax Act, 1961. Additionally, the assessee argued that the due date for payment of PF and ESIC should be considered from the end of the month in which the salary is paid, not from the end of the month for which the salary is paid.

During the scrutiny, it was observed that the assessee had not deposited the contributions towards EPF and ESIC in the government account by the specified due dates. The assessing officer disallowed the employees' contributions to PF and ESIC, even after considering the grace period, as per the provisions of the Income Tax Act. The assessee appealed to the CIT(A), who confirmed the disallowances relying on the decision of the jurisdictional high court in the case of CIT vs. Gujarat State Road Transport Corporation.

The Appellate Tribunal noted that the employer had not credited the sum received as employees' contribution to the employees' accounts within the due dates specified under the Provident Fund Act and ESIC. Referring to the decision of the jurisdictional High Court, the Tribunal upheld the CIT(A)'s decision, stating that the assessee would not be entitled to deduction if the sum is not credited by the due date. Consequently, the appeal of the assessee was dismissed, affirming the disallowance of employees' contributions to PF and ESIC.

In conclusion, the Appellate Tribunal upheld the decision of the CIT(A) regarding the disallowance of employees' contribution to Provident Fund and ESIC, based on the failure to credit the sums within the prescribed due dates. The judicial findings and the precedent set by the jurisdictional High Court supported the disallowance, leading to the dismissal of the appeal.

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