TaxTMI 
TaxTMI 
2021 (6) TMI 545
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.... towards belated payment of employee's contribution to PF and ESI amounting to Rs. 6,90,356/- is wholly unsustainable both on facts and in law. 2. The order of the Ld. CIT(A) failed to consider that the employees' contribution to EPF and ESI at Rs. 6,90,356/- was duly paid before the due date of filing the return of income and thereby erred in disallowing the same. 3. Any other ground or grounds that may be urged at the time of hearing." 3. The brief facts of the case are that the assessee is a private limited company filed his return of income on 30/10/2018. Thereafter, the return was processed by the Centralised Processing Centre and the assessment was completed on 12/11/2019 wherein certain additions were made. Amongst which one of ....
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....ue date as prescribed by the Provident Fund Act and ESI Act. The appellant has submitted that if the payments are made before the filing of return of income, they should be allowed. However, it should be noted that section 43B(b) refers to the 'Employer's contribution' to the Provident Fund or ESI and not 'Employee's contribution' to Provident Fund or ESI. This distinction has been understood in light of the CBDT Circular No. 22/2015 dated 17/12/2015. In this background, the contention of the appellant is not accepted as it is not allowable as per Income Tax Act. The disallowance made by the Assessing Officer is upheld." 5. Before us, the Ld. AR submitted that the assessee had remitted the employee's contribution towards PF and ESI which ....
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.... contract of service or otherwise; 7. Further Section 43B of the Act, only provides that deduction will be allowed with respect to employer's contribution to provident fund if the same is remitted within the due date of filing the return of income. The relevant portion of Section 43B is extracted herein below for reference:- "[Certain deduction to be only on actual payment.] 43B "notwithstanding anything contained in any other provisions of this Act, a deduction otherwise allowable under this Act in respect of --- (a)------------------- (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees" ---------....
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....o remittance of employee's contribution to recognized Provident Fund/ESI, deduction will be allowable to the assessee only if the same is remitted within the due date mentioned in the relevant P.F. Act and with respect to employer's contribution to recognized Provident Fund, Section 43B of the Act makes it clear that deduction will be allowable if the remittance is made with in the due date of filing the return of income. The Hon'ble Gujarat High Court in the case CIT vs. Gujart State Road Transport Corporation reported in [2014] 366 ITR 170 (Guj.) has observed as under on the issue:- "Under section 2(24)(x) of the Income Tax Act, 1961 any sum received by the assessee-employer from his employees as contribution to any provident fund or su....
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.... the employees' contribution if it is deposited in the accounts of the concerned employees and in the concerned fund such as provident fund, employees' State insurance contribution fund etc., provided the sum is credited by the assessee to the employees' accounts in the relevant fund or funds on or before the "due date" under the Provident Fund Act, Employees' State Insurance Act, Rule, Order or Notification issued thereunder or under any standing order, award, contract or service or otherwise. There is no amendment in section 36(1)(va) and even the Explanation to section 36(1)(va) is not deleted and is still on the statute and is required to be complied with. Merely because the second proviso to section 43B which provided that even with re....
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....nly the contribution payable by the employer or the assessee to the respective funds. Therefore, sections 36(1)(va) and 43B(b) operate in different fields, i.e., the former takes care of the employees' contribution and the latter the employer's contribution. The assessee is entitled to get the benefit of deduction under section 43B(b) as provided under the proviso thereto only with regard to the portion of the amount paid by the employer to the contributory fund. Held, allowing the appeal, that since the assessee had admittedly not paid the remittance of the employees' contribution to the provident fund and ESI within the dates prescribed under the respective Act, the assessee was not entitled to deduction U/s. 43B of the amounts deducted....