AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2014 (10) TMI 402
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.... 2(24)(x) r/w. 36(1)(va) as per which employee's contribution to ESI, PF and Pension fund is deductible only if payment is made before the due date as prescribed in the respective Act, Rule, Order or Notification governing such funds is erroneous and contrary to provisions of Income Tax Act, 1961 ? (2) Whether on the facts and circumstances of the case and in law, the Tribunal was right in ignoring the clear distinction between employee's contribution to ESI, PF and pension fund and employer's contribution and the fact that the decision of the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. 319 ITR 306 is applicable only to employer's contribution ? (3) Whether on the facts and circumstances of the case and i....
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....t fund, ESI and pension fund in a sum of Rs. 32,03,947/-. 5. While disallowing the claim for deduction, the department contended that payment of employees' contribution had to be made within the due date viz. on or before the 15th of every succeeding month. Admittedly, these payments were not so made but were paid after the due dates. The Assessing Officer, therefore, disallowed the deduction made to the extent of Rs. 32,03,547/-. 6. The Commissioner of Income Tax (Appeals) dismissed the issue of disallowance on account of payment of employees' contribution which was covered under section 36(1)(va) of the I.T. Act relying on the decision of this Court reported in 298 ITR 149 and held that the amendments to section 43B, on the basi....
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....s for an answer to question No.1 in these Appeals. 9. Mr.Naniwadekar, learned counsel appearing on behalf of the assessee on the other hand relied upon the decision of the Supreme Court upon the decision of Alom Extrusions (supra) and pointed out that the scheme of the Income Tax Act, 1961 as it existed prior to April 1, 1984 and thereafter. 10. He submitted that Section 43B made it mandatory for the department to grant deduction in computing the income under section 28 in the year in which tax, duty, cess, etc. is actually paid. However, Parliament took cognizance of the fact that the accounting year of a company did not always tally with the due dates under certain statutes and, therefore, by way of the first proviso, an incentive / rel....
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....ul benefits under social welfare legislations by delaying payment of contributions to the welfare funds. 12. Mr.Naniwadekar also relied upon the judgment dated 11th July, 2014 in Income Tax Appeal No.399 of 2012 passed by this Court, to which one of us (S.C.Dharmadhikari,J.) was a party where following two issues of law were raised.:- "(A) Whether on the facts and in the circumstances of the case, the Tribunal, in law, was right in allowing the claim of the Assessee on account of delayed payments of P.F. of employees' contribution amounting to Rs. 1,82,77,138/- by relying on the decision of the Hon'ble Supreme Court in the case of CIT Vs/. Alom Extrusions Ltd. (319 ITR 306) ? (B) Whether on the facts and in the circumstances of t....
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.... been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36, and where such payment has been made otherwise than in cash, the sum has been realised within fifteen days from the due date." 14. From a reading of above, it is clear that the employerassessee would be entitled to deduction only if the contribution to the employee's welfare fund stood credited on or before the due date and not otherwise. It transpires that Industry once again made representations to the Ministry of Finance to remove this anomaly. The result was that an amendment was inserted which came into force with effect from 1st April, 2004 and two cha....