TaxTMI 
TaxTMI 
2021 (10) TMI 223
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....ct and ITA No.605/Del/2021 is an appeal against the assessment order framed u/s. 154 of the Act. 3. We will first address to the appeal in ITA No.604/Del/2021. 4. Briefly stated the facts of the case are that while processing the return u/s.143 (1) of the Act CPC disallowed Rs. 127225/- on account of late deposit of provident fund and Rs. 171402/- on account of late deposit of ESI. 5. Assessee assailed the order before the NFAC but the NFAC was of the firm belief that the decision of the Hon'ble Gujarat High Court in the case of Gujarat State Road Transportation 366 ITR 170 fairly apply on the facts of the case and following the same, the appeal of the assessee is dismissed. 6. Before me the strong reliance was placed on the dec....
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....payment to the appropriate authority but at the same time it was also a fact that all the contributions received by the assessee from its employees have been deposited before the due date of filing of return of income. We further find that identical issue arose in the case of Dee Development Engineers Ltd. (supra) wherein the Co-ordinate Bench of Tribunal after considering the decision in the case of CIT vs. AIMIL Ltd. (supra) decided the issue of the assessee by observing as under: "7. We have heard both the parties and perused all the relevant material available on record. As regards Ground No. 1, the assessee company has not deposited the employees' contribution within the due date which is prescribed under the said statute i.e.....
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....ra) has also considered the amendment brought to the relevant provisions and decided a similar quarrel as under :- 12. Thus, it is clear that there are series of decisions of various High Courts on this issue wherein it was held that the payment of employees contribution if made before due date of filing of return of income u/s.139(1), the same is allowable deduction against the corresponding income of the said amount treated as per the provision of Section 2(24)(x) of the Income Tax Act. We are conscious about the decisions of other High Court taking a different view on this issue. However, the decision of the Hon'ble Jurisdictional High Court is binding on the Tribunal. By the Finance Act, 2021, the provision of Section 36(1)(va)....
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.... his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees." Section 36 of the Act pertains to the other deductions. Sub-section (1) of the said section provides for various deductions allowed while computing the income under the head "Profits and gains of business or profession'. Clause (va) of the said sub-section provides for deduction of any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Expla....
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....nism to ensure the compliance by the employers of the labour welfare laws. Hence, it needs to be stressed that the employer's contribution towards welfare funds such as ESI and PF needs to be clearly distinguished from the employee's contribution towards welfare funds. Employee's contribution is employee own money and the employer deposits this contribution on behalf of the employee in fiduciary capacity. By late deposit of employee contribution, the employers get unjustly enriched by keeping the money belonging to the employees. Clause (va) of sub-section (1) of Section 36 of the Act was inserted to the Act vide Finance Act 1987 as a measures of penalizing employers who mis-utilize employee's contributions. Accordingly, in order t....