TaxTMI 
TaxTMI 
2021 (12) TMI 798
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. 9,59,624/- made by the A.O, CPC passed order under section 143(1)/154 in respect of delayed payment of employees' contribution to PF & ESI. 3. Facts of the case, in brief, are that the CPC Bangalore vide order dated 25.12.2019 has made adjustment of Rs. 9,59,624/- under section 143(1)(a) on account of late payment of PF & ESI claimed by the assessee on the ground that this was not paid within prescribed due date and deposited late in the light of provision of Section 2(24)(x) read with section 36(1)(va) of the I.T. Act, 1961 relying upon the information given by the Auditor in Form 3CD. 3.1. Aggrieved by order of the DCIT, CPC, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A) it was submitted that assessee ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll accordingly apply to A.Y. 2021-2022 and subsequent assessment years. He submitted that Section 1 (2)(a) of Finance Act, 2021 specifically mentions that Sections 2 to 88 shall come into force on the First Day of April, 2021. However, as per Finance Act, 2021, Section 9 relates to amendment to Section 36 and Section 11 relates to amendment to Section 43B. Referring to various decisions, he submitted that after 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. Or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....der section 139(1), the same is an allowable deduction under section 43B of the I.T. Act, 1961. However, the same amendment would not be applicable for the belated payment to employees' contribution to PF & ESI. He submitted that since the assessee has received the money by taking it from the salary of the employees and kept the same without making payment to the Government Account, the concession given in Section 43B is not available with respect to employees' 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 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le Delhi High Court in the case of PCIT vs., Pro Interactive Service (India) Pvt. Ltd., vide ITA.No.983/2018 order dated 10.09.2018 has held that no disallowance is called for where the assessee had paid the employees' contribution to PF & ESI before the due date of furnishing of return of income under section 139(1) of the I.T. Act, 1961. 7.1. I find the Hon'ble Delhi High Court In the case of PCIT vs., Pro Interactive Service (India) Pvt. Ltd., (supra), following the decision in the case of CIT vs., AIMIL Ltd., (supra), has held that legislative intent was/is to ensure that the amount 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 bela....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... ITA No. 4959/DEL/2016 ( A.Y 2011-12) has held 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. Provident Fund and ESIC. This issue is dealt by the Hon'ble Delhi High Court in case of CIT vs. M/s Bharat Hotels Ltd. 410 ITR 417 wherein the issue is decided in favour of the revenue, without considering the decision of the Hon'ble Delhi High Court in case of CIT vs. AIMIL Ltd.(2010) 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 (In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deduction for 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. Explanation to the said clause provides that for the purposes of this clause, "due date" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or....