TaxTMI 
TaxTMI 
2016 (1) TMI 367
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.... failed to deposit the amount of employee's contribution towards PF in certain month within the prescribed time limit as per the provisions of the Act. Accordingly, the AO made a disallowance of Rs. 6,14,017/- u/s 36(1)(va) of the I.T. Act. 2.2 The assessee preferred first appeal before the ld. CIT(A) who deleted the addition made by the AO on account of late deposition of employee's PF contribution by considering the decision of Coordinate Bench in the case of DCIT vs. Amit Basu (ITA No. 765/JP/2011 dated 25-01-2012). 2.3 During the course of hearing, the ld. DR relied on the order of the AO. 2.4 To this effect, the ld. AR of the assessee relied on the order of ld. CIT(A) and decision of Coordinate Bench in the case of DCIT vs. Amit Basu (supra) besides decisions of Hon'ble Jurisdictional High Court as under:- (i) CIT vs. State Bank of Bikaner & Jaipur (2014) 363 ITR 70 (Raj.) (ii) CIT vs. Jaipur Vidyut Vitran Nigam Ltd. (2014) 363 ITR 307 (Raj.) (iii) CIT vs. Udapur Dugdh Utpadak Sahakari Sangh Ltd. (2014) 366 ITR 163 (Raj.) The ld. AR of the assessee prayed for dismissing this ground of the Revenue 2.5 We have heard the rival content....
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....along with such return." 3.6 The Honb'le Apex Court in the of Alom Extursion Ltd. 319 ITR 306 has considered the provisions of Section 2(24) (x) as well as 36(1)(va) of the Act. The Honb'le Apex Court noticed that on the basis of the provisions of Section 43B before insertion of Second proviso, it was clear that employers were entitled to deduction only if the contribution stands credited on or before due date given in the PF Act. The second proviso created further difficulties and therefore, second proviso was omitted and first proviso was amended. Before Honb'le Apex Court, the Revenue contended that the Parliament has maintained a clear dichotomy between payment of tax, duty, cess or fee on one hand and payment of contributions to the welfare funds on the other. Such distinction was consciously kept upto April, 2004. It was further argued that the amendment made by Finance Act 203 cannot be considered as curative. This approach of the Department was not accepted. Section 43B was introduced with the object to disallow deduction claimed merely by making a book entry based on mercantile system of accounting. Section 43B made it mandatory for the Department to g....
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....ed to in clause (b) shall not be allowed unless such sum has actually been paid in cash or by issuance of cheque or draft or by any mode on or before the due date, as defined in the Explanation below clause (va) of sub-section (1) of Section 36. Thus, the assessee would earn the entitlement only if the actual clause (va) of sub-section (1) of Section 36 of the Act. As per the said Explanation ''due date'' means the date by which the assessee is required, as an employer, to credit the employees' contribution to the employees account in the relevant fund under any Act, rules, order or notification issued thereunder or under any standing order award contract of service or otherwise.'' 3.7 The Hon'ble Delhi High Court has considered the issue after considering Section 36(1)(va) and Section 2(24)(x) of the Act. The Hon'ble Delhi High Court held that contention of the revenue is not acceptable in view of rejection of SLP of the revenue by Hon'ble Apex Court in the case of CIT Vs. Vinay Cement Ltd. , 313 ITR 1. Section 36(1)(va) requires that the sum should be credited by the assessee to the employees account. It nowhere mentioned that the sum should be paid. There is....
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....of the AO. 3.3 We have heard both the parties. Hon'ble Apex Court in the case of CIT vs Alom Extrusions Ltd., 319 ITR 306 has held that the proviso introduced by the Finance Act, 2003 is curative in nature and is retrospective. However, we are concerned with the assessment year 2007- 08. The Hon'ble Apex Court has referred to the explanation given in Section 36(1)(v)(a) of the Act. The issue of employee's contribution covered u/s 43B has been considered by the Hon'ble Karnataka High Court in the case of CIT vs Sabri Enterprises, 298 ITR 141. The Hon'ble Apex Court has upheld the decision of Hon'ble Karnataka High Court in the case of CIT vs Sabri Enterprises (supra) while deciding the appeal in the case of CIT vs Alom Extrusions Ltd. (supra). The Hon'ble Apex Court has dismissed the SLP in the case of CIT vs Vinay Cement 313 ITR 1 (St.). While dismissing the SLP, the Hon'ble Apex Court has referred to decision of Hon'ble Gauhati High Court in the case of CIT vs George Williamson (Assam) Ltd., 284 ITR 619. In the case before Hon'ble Gauhati High Court, the issue was in respect of contribution of PF and ESI relating to employees shares. It....