Employer's EPF and ESI Contribution Disallowed for Late Payment: Tribunal Decision

The Tribunal affirmed the disallowance of Rs. 11,37,694 by the Assessing Officer for late payment of Employee's Contribution towards EPF and ESI under Section 36(1)(va) for A.Y. 2015-16. The decision was based on the failure to credit the sum before the due date, as required by law. The Tribunal upheld the First Appellate Authority's decision, citing the jurisdictional High Court's precedent and dismissed the appeal for lacking merit.

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Issues:
1. Disallowance of Employee's Contribution towards EPF and ESI under Section 36(1)(va) of the Income Tax Act, 1961 for A.Y. 2015-16.

The judgment pertains to an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals) and the ACIT, Ahmedabad, regarding the disallowance of Rs. 11,37,694 made by the Assessing Officer on account of late payment of Employee's Contribution towards EPF and ESI under Section 36(1)(va) of the Income Tax Act, 1961. The assessee had deposited the contribution after the due date, leading to the disallowance. The First Appellate Authority confirmed the disallowance based on the jurisdictional High Court's decision in the case of CIT vs. Gujarat State Road Transport Corporation (GSRTC), thereby upholding the addition made by the Ld. CIT(A). The Tribunal found no merit in the assessee's appeal and dismissed it.

The key issue in this case was the disallowance of Employee's Contribution towards EPF and ESI under Section 36(1)(va) of the Income Tax Act, 1961 for the Assessment Year 2015-16. The assessee had deposited the contribution after the due date, which led to the disallowance as per the provisions of Section 36(1)(va) r.w.s. 2(24)(x). The Tribunal noted that the deduction from employees' contribution is allowable only if the sum is credited by the employer to the employees' account in the relevant fund before the due date, which the assessee had failed to do. The First Appellate Authority relied on the decision of the jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation (GSRTC) to confirm the addition made by the Assessing Officer. The Tribunal upheld this decision, stating that it was just and proper without ambiguity, and dismissed the appeal as devoid of merit.

In conclusion, the Tribunal affirmed the disallowance of Rs. 11,37,694 made by the Assessing Officer on account of late payment of Employee's Contribution towards EPF and ESI under Section 36(1)(va) for the Assessment Year 2015-16. The decision was based on the failure of the assessee to credit the sum to the employees' account in the relevant fund before the due date, as required by law. The Tribunal upheld the First Appellate Authority's decision, citing the precedent set by the jurisdictional High Court in a similar case, and dismissed the appeal, finding it lacking in merit.

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