Tribunal overturns disallowance of Provident Fund contribution, ruling in favor of assessee.

The Tribunal ruled in favor of the assessee, holding that the disallowance of employees' contribution to Provident Fund under Sec. 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961 was unjustified post-amendment of Sec. 43B. The disallowed amount of &8377; 6,30,867 was deleted, overturning the CIT(A)'s decision. The appeal was allowed on 26/09/2018.

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Issues:
Disallowance of employees' contribution to Provident Fund under Sec. 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961.

Analysis:
1. The appeal was filed against the order passed by the Commissioner of Income Tax (Appeals)-3, Thane, arising from the order passed by the Assessing Officer under Sec. 143(3) of the Income-tax Act, 1961 for A.Y. 2013-14.

2. The assessee, engaged in manufacturing and repair of electrical transformers, filed its return of income for A.Y. 2013-14 on 27.08.2013, declaring total income at &8377; 2,23,68,227. The case was selected for scrutiny assessment under Sec. 143(2).

3. The Assessing Officer disallowed the amount of &8377; 6,30,867 deposited towards Employees' Contribution to Provident Fund beyond the stipulated date under the Provident Fund Act. The assessee argued that the payment was made before the due date for filing the return of income, relying on a Supreme Court judgment.

4. The CIT(A) upheld the disallowance, leading the assessee to appeal. The Authorized Representative contended that the payment was made before the due date for filing the return of income, presenting a detailed chart to support the claim.

5. The Authorized Representative argued that the lower authorities erred in distinguishing between employees' and employers' contributions to the provident fund, citing a Bombay High Court judgment that both contributions fall under the amended Sec. 43B of the Act.

6. The Departmental Representative supported the lower authorities' orders.

7. The Tribunal observed that the issue revolved around whether the disallowance of employees' contribution to provident fund was justified under the post-amended Sec. 43B of the Act. The Tribunal referred to the Bombay High Court judgment, concluding that the disallowance could not be sustained as it was not in line with the court's decision.

8. Consequently, the disallowance of &8377; 6,30,867 was deleted, and the CIT(A)'s order upholding the disallowance was set aside.

9. The appeal of the assessee was allowed, and the order was pronounced in open court on 26/09/2018.

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