TaxTMI 
TaxTMI 
2010 (8) TMI 768
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....ontribution to Provident Fund on the ground that the same is not paid on or before the due date being 15th of each month. 2. The learned Commissioner of Income Tax (Appeals) erred in not appreciating the fact that Employees Contribution to Provident Fund has been paid by the appellant within the grace period of five days allowed for payment to be made and hence the payments are on or before the due date. 3. The learned Commissioner of Income Tax (Appeals) erred in not following the ratio of the decisions of some of the High Courts and Income Tax Appellate Tribunals especially in the following cases where it has been held that payments made within grace period should not be disallowed under section 43B of the Act - (a) Rajhans Metals P. L....
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.... to ESIC dues. Aggrieved, assessee carried the matter in appeal before the CIT(A) but without any success. The CIT(A) confirmed the action of the Assessing Officer, barring for one payment which was not made within prescribed period as it ended on independence day, and observed as follows:- "In terms of section 2(24)(x) the contribution of the employees, as soon as deducted by the employer, is deemed to be the income the income of the appellant. Further, in terms of section 36(1)(va), when these amounts are paid to the respective authorities within the due date, these payments are deemed to be expenditure of the appellant. What is deducted is actually not the income of the appellant but is deemed to be the income and what is paid within t....
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....as the employees' contribution are concerned, the can be allowed only when these amounts are paid to the account of government authorities within the due date, to the exclusion of the grace period. It needs to be mentioned that when employees contribution are deducted the amount so deducted belongs to government authorities and the express intention of the legislature, that such government money must be deposited within the due date (and not expressed to be the grace period) if credit has to be given for such payments. Therefore the addition made by the A.O. on account of employees contribution deposited beyond the due date is held to be justified. However, one of the payment due on 15th August 2004 amounting to Rs.49461/- has been paid on ....
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....unds of the employer. In this view of the matter it has been held that the contribution of the employees' paid within the due date for filing the return of income is allowable under section 43B. This order of the Tribunal has not been referred to in the subsequent order of the Tribunal dated 28th January 2010 in the case of the same assessee, namely, Simplex Engineering & Foundry Works, for the assessment year 2004-05 in ITA NO.378/Mum./2009, and with reference to the earlier order, the disallowance of the contribution was upheld by the Tribunal. In another order passed on 28th January 2010 in ITA no.6847/Mum./2008 (assessment year 2005-06) in the case of Pink Pen Private Ltd. Vs ITO, the Tribunal was dealing with the employees' contributio....