2014 (8) TMI 677

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....March 15, 2010, passed by the Commissioner of Income-tax (Appeals), Udaipur ("the CIT (A)") has been dismissed. The facts in brief are that the assessee is engaged in the business of dairy product, processing and marketing of milk and milk products and cattle feed, etc. It filed its return of income for the assessment year 2006-07 on October 30, 2006, declaring total income of Rs. 9,80,723. While completing the assessment under section 143(3) of the Income-tax Act, 1961 ("the Act"), vide its order dated December 26, 2008, the Assessing Officer (AO) noticed that the assessee had deposited the payment of Rs. 14,60,412 in the provident fund and Rs. 973 in the employees' State insurance fund with delay that is the said payments were depo....

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....the learned counsel for the Revenue that the Commissioner of Income-tax (Appeals) and the Income-tax Appellate Tribunal fell in error in deleting the addition made under section 36(1)(va) read with section 2(24)(x) of the Act without considering the facts and legal aspect involved therein. It was submitted with reference to section 43B of the Act that the deletion of the second proviso therein, after the amendment by the Finance Act, 2003 ; the contribution of the employer is governed by the provisions of section 43B, whereas the employees' contribution continues to be governed by the provisions of section 36(1)(va) read with section 2(24)(x) of the Act and, therefore, the Income-tax Appellate Tribunal fell in error in upholding the ord....

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....ntributions to labour welfare funds. The reason appears to be that the employer(s) should not sit on the collected contributions and deprive the workmen of the rightful benefits under social welfare legislations by delaying payment of contributions to the welfare funds. However, as stated above, the second proviso resulted in implementation problems, which have been mentioned hereinabove, and which resulted in the enactment of the Finance Act, 2003, deleting the second proviso and bringing about uniformity in the first proviso by equating tax, duty, cess, and fee with contributions to welfare funds." Further, the hon'ble Supreme Court in CIT v. Vinay Cement Ltd. [2009] 313 ITR (St.) 1 (SC) while dismissing the special leave petition ....