Tribunal decision on employee contributions & TDS: upheld provident fund disallowance, dismissed TDS appeal.

The tribunal upheld the disallowance of the employee's contribution to provident fund and ESI, citing Section 36(1)(va) of the Income Tax Act and relevant case laws. The appeal on this issue was held against the assessee. However, the tribunal dismissed the appeal on the disallowance under section 40(a)(ia) for not deducting tax at source, as the Ld. CIT(A) had deleted the addition made by the Ld. AO. Ultimately, the tribunal confirmed the orders of the Revenue Authorities, resulting in the dismissal of the assessee's appeal.

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Issues:
1. Disallowance of employee's contribution to provident fund and ESI.
2. Disallowance under section 40(a)(ia) for not deducting tax at source on audit fees and interest expenditure.

Issue 1: Disallowance of employee's contribution to provident fund and ESI:

The appeal was filed against the order of the Ld. CIT(A) upholding the addition made by the Ld. AO for non-remittance of employee's contribution to provident fund and ESI. The Ld. CIT(A) confirmed the disallowance, stating that the payments were made after the statutory due date. The appellant argued that the remittances were made before the due date of filing the return, relying on judicial decisions. However, the tribunal found no merit in the appellant's submission. Section 36(1)(va) of the Act allows deduction only if the employee's contribution is remitted within the due date mentioned in the relevant Act. The tribunal clarified that Section 43B, which pertains to employer's contribution, does not apply to employee's contribution. Citing relevant case laws, the tribunal upheld the disallowance of the employee's contribution to provident fund and ESI. Consequently, the appeal on this issue was held against the assessee.

Issue 2: Disallowance under section 40(a)(ia) for not deducting tax at source:

The Ld. AO disallowed 30% of the amount debited to the P & L Account towards audit fees and interest expenditure for not deducting tax at source. On appeal, the Ld. CIT(A) deleted the addition made by the Ld. AO, resulting in this ground raised by the assessee not surviving. Therefore, the tribunal dismissed the appeal of the assessee on this issue.

In conclusion, the tribunal confirmed the disallowance of the employee's contribution to provident fund and ESI, citing relevant provisions of the Income Tax Act and judicial precedents. Additionally, the tribunal noted the deletion of the disallowance under section 40(a)(ia) by the Ld. CIT(A). The appeal of the assessee was ultimately dismissed, and the orders of the Revenue Authorities were upheld.

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