TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 771
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.... respect of delayed payment of employees' contribution to PF & ESI. 3. Facts of the case, in brief, are that the assessment of the assessee relevant to the A.Y. 2018-19 has been made under section 143 [1] of the I.T. Act, 1961 vide order dated 15.11.2019, wherein, employees' contribution of Rs. 21,40,164/- towards ESIC and EPF were paid late in terms of the provisions of ESIC and EPF, but before the filing of return of income for the present period. The return of income for the present period was to be filed by 31.10.2018 [extended date] and the assessee filed the same on 13.10.2018. The assessee paid the entire amount before 13.10.2018. 3.1. The DCIT, CPC Bangalore vide order dated 15.11.2019 made addition/disallowance of Rs. 21,40,164/-....
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.... considering the various decisions relied on by the Ld. CIT-DR, the Coordinate Benches of the Tribunal are consistently taking the view that employees' contribution to PF & ESI, if paid before the due date of filing of the income tax return under section 139(1), is an allowable deduction and no disallowance can be made. 1. Order of the ITAT, Hyderabad in the case of Crescent Roadways Pvt. Ltd., vs., DCIT vide ITA.No.1952/ Hyd/2018 dated 01.07.2021. 2. Order of the ITAT, Delhi in the case of DCIT vs., Dee Development Engineers Ltd., vide ITA.No.4959/Del./2016 dated 08.04.2021. 3. Order of the ITAT, Delhi in the case of DCIT vs., Planman HR (P) Ltd., vide ITA.No.5152/ Del./2017 dated 15.07.2021. 4. Order of the ITAT, Chennai in the ca....
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....s' contribution. Referring to the amendments in the provisions of Section 43B as well as 36(1)(va), he submitted that the Explanation-2 inserted by Finance Act, 2021 clarifies that the definition of "Income" as provided in Section 2(24)(x) remains unchanged and provision of Section 43B does not apply and deemed to never have been applied for the purpose of determining the due date of payment of employees' contribution to PF & ESI. He accordingly submitted that the grounds raised by the assessee should be dismissed. 7. I have considered the rival arguments made by both the sides, perused the orders of the A.O. and the Ld. CIT(A) and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me.....
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....ount paid is allowed as expenditure only when payment is actually made. It was further held that it was not the legislative intent and objective to treat belated payment of Employees' Provident Fund & Employees' State Insurance Scheme as deemed income of the employer under section 2(24)(x) of the I.T. Act, 1961. 7.2. I find the Coordinate Bench of the Tribunal in the case of Insta Exhibitions Pvt. Ltd., New Delhi vs., Addl. CIT, Special Range-4, New Delhi vide ITA.No.6941/Del./2017 order dated 03.08.2021 while allowing such belated deposit of employees' contribution to PF & ESI as per the respective Act, but, paid before the due date of filing of the income tax return, deleted such disallowance by observing as under : "8. We have careful....
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....321 ITR 508 (Del.). But the Ld. AR relied upon the decision of the Hon'ble Delhi High Court in case of Pr. CIT vs. Pro Interactive Service (India) Pvt. Ltd. ITA No. 983/2018 pronounced on 10.09.2018 wherein the Hon'ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon'ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two ....
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....ployer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. It is proposed to insert Explanation 2 to clause (va) of sub-section (1) of the said section so as to clarify that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the "due date" under the said clause. This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021- 2022 and subsequent assessment years." Therefore it is apparent that the above amendment do not apply to the assess....