2020 (12) TMI 1143

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....e business of production of cement and cement based products claimed, inter alia, prior period expenditure and employee's contribution to the PF which was paid belatedly u/s. 36(1)(va) but before the due date of filing the return of income for the AY 2013-14. While making the assessment, the AO disallowed them. Aggrieved, the assessee filed an appeal before the CIT(A). The Ld.CIT(A) dismissed the appeal. Aggrieved against the order of the Ld.CIT(A), the assessee filed this appeal with the following grounds of appeal: 1.1 The CIT(A) erred in upholding the disallowance of prior period expenses of Rs. 17,06,000/- 1.2 The CIT(A) erred in upholding that the failure on the part of the Appellant to book its expenses in the gi....

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....39;s contribution, the Ld.AR relied on the division bench decision of the jurisdictional High Court in the case of CIT v. Industrial Security & Intelligence India Ltd., reported in Tax Case Appeal Nos. 585 & 586 of 2015 dated 24.07.2015. 4. Per Contra, the Ld.DR supported the orders of the lower authorities and further relied on the jurisdictional High Court decision in the case of CIT v. Madras Radiators & Pressings Ltd., dated 31.12.2002 (2003) 129 Taxman 709 (Mad). 5. We heard the rival submissions and gone through the relevant materials. On the issue of disallowance of prior period expenses, it is clear from the Assessment Order that this issue has not been properly examined. Therefore, we deem it fit to remit this issue to the AO....

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.... etc., this Tribunal held as under: ".......10.3.11 Thus, keeping in view strict and literal interpretation of provisions of Section 36(1)(va) of the 1961 Act read with Explanation 1 and Section 2(24)(x) of the 1961 Act, the assessee will not be entitled for deduction as the employee contribution towards PF received by assessee was deposited late beyond the time stipulated under the relevant statute governing PF. But, it is equally true that the Constitutional Courts viz. Hon'ble High Courts and Hon'ble Supreme Court in India have powers to read down the provisions of the 1961 Act to make it workable and to avoid absurdity. On perusal of the decision of Hon'ble Supreme Court in the case of Alom Extrusion(supra), it is o....

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....he time stipulated as due date as prescribed under the provisions of Statute governing PF/ESI Act. Thus, the applicable provision as is contained in Section 36(1)(va) is read down by most of the Constitutional Courts including our Jurisdictional High Court (barring Hon'ble Gujarat High Court and Hon'ble Kerala High Court) to make it workable as otherwise the tax-payer will lose the deduction for ever if the employee contribution is not deposited within due date as prescribed under relevant statute, although the said contribution stood deposited by employer belatedly before the due date for filing of return of income u/s. 139(1) of the 1961 Act and the amount will stood brought to tax as income keeping in view provisions of Section 2....