TaxTMI 
TaxTMI 
2022 (1) TMI 828
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....add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 2. No one appeared on behalf of the assessee at the time of hearing. The notice sent through speed post was returned with remark "left". The assessee has not provided any new address to the Registry. Therefore, the appeal was taken up for hearing in the absence of assessee. 3. The only effective ground in this appeal is against the sustaining of addition of Rs. 1,34,148/- made u/s 36(1)(va) of the Act relating to late deposit of PF & ESI. 4. Facts giving rise to the present appeal are that the present electronically filed appeal is directed against the intimation u/s 143(1) of the Income Tax Act, 1961 ("the Act") issued by Centralized Processing Centre, Banglore on 27.03.2019. The assessee filed return of income on 30.10.2017 for Assessment Year 2017-18, declared total income of Rs. 18,92,090/-. The return of income was duly processed by CPC, Bangalore at an income of Rs. 28,16,410/- by making (i) addition of Rs. 1,34,148/- on account of late deposit of PF/ESI u/s 36(1)(va) of the Act; (ii) addition of Rs. 2,30,759/- on account of....
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....ided for In the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- *** [(va) 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.-For the purposes of this clause, "due data" means the dote 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 notification Issued thereunder or under any standing order, award, contract of service or otherwise;]" 4.1 The provisions of the law are very clear. The facts from the written submission filed by the appellant shown that an amount of Rs. 1,34,148/- contributions received from the employees for various funds deposited after the due date was not allowable expenditure u/s 36(1)(va). This was a mistake apparent from the record. The income is rightly assessable in the hands of the appellant under the....
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....e employees account in the relevant fund under any Act or rule or order or notification issued thereunder or any standing order or award or service or otherwise. Meaning thereby, in case, employer fails to deposit the entire amount towards employees contribution on account of PF & ESI with concerned department on or before the due date under PF & ESI, the assessee shall be entitled for deduction to that extent. 10. Decision of the Hon'ble Supreme Court relied upon by the assessee cited as CIT vs. Alom Extrusions Ltd. (supra) is not applicable to the facts and circumstances of the case because Hon'ble Supreme Court has decided the issue in Alom Extrusions Ltd. case quo employers contribution as per section 43B(b) of the Act and not qua employees contribution U/S 36(1)(va) of the Act. 11. Hon'ble Jurisdictional High Court in case of CIT vs. Bharat Hotels Ltd. (2019) 410 ITR 417 {Deihl} (supra) decided the identical issue qua delayed deposit of employees contribution on account of PF & ESI against the assessee by holding that assessee would be entitled to deduction In terms of section 36(1)(va) of the Act to the extent if the employees contribution on acc....
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....ly was entitled to claim the benefit and properly treat such amounts as having been duly deposited, Which were in fact deposited within the period prescribed (I.e. 15 + 5 days In the case of EPF and 21 days + any other grace,. period in terms of the extent notification). As far as the amounts constituting deductions from employees' salaries towards their contributions, which were made beyond such stipulated period, obviously the assessee was not entitled to claim the deduction from its returns. 9. In view of this discussion, the Revenue's appeal is partly allowed. The AO is directed to examine the contributions made with reference to the dates when they were actually made and grant relief to such of them which qualified for such relief in terms of the prevailing provisions and notifications. We also clarify that the assessee would be entitled to deduction in terms of Section 36(l)(va) of the Act. 12. In view of what has been discussed above and following the decision rendered by the Hon'ble jurisdictional High Court incase of CIT vs. Bharat Hotels Ltd. (supra),.we are of the considered view that the assessee company is not entitled for deduction of Rs.....