2022 (4) TMI 441

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....oncerning AY 2014-15. 2. As per its grounds of appeal, the Revenue has challenged the reversal of disallowance of Rs. 3,57,13,697/- made by the Assessing Officer under Section 36(1)(va) r.w. Section 2(24)(x) of the Act on account of delayed deposit of employee's contribution towards PF and ESIC. 3. The CIT(A) has reversed the action of the Assessing Officer in its appellate order. The operative paragraph of the order of the CIT(A) is reproduced hereunder: 4.4.3. The submissions of the appellant the case laws cited and the relevant orders have been considered. With regard to the issue regarding late payment of ESIC and PF, the following points emerge: (i) Briefly the facts are that in respect of employees' contribution the PF &....

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....ch amounts of employee's contributions where the deposit has been made by the appellant after the due dates under the respective Acts. (iv) Aggrieved with this, the appellant has filed the appeal claiming that the amount should be allowed u/s. 43B as it has been deposited before the due date of filing of return. The arguments taken before the AO have been reiterated in the appeal. (v) It is pertinent to note that contribution to PF and ESI have two different components. The employee's contribution is deducted from the salary/wages of the employees and the employer also makes contribution. PF and ESI are important legislation for providing social security to employees. Under section 2(24)(x) of the I.T. Act, any sum received by a....

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....366 ITR 170 (Gujarat) (2014) has dealt with the issue and has analysed the provisions in detail. (vii) CBDT circular No. 22/2015 dated 17.12.2015 has further clarified about the deletion of second proviso and amendment of first proviso to section 43B are applicable in the case of employer's contribution to PF and ESI and payments made before due date of filing of ROI are allowable u/s. 43B. However, this circular states that it does not apply to claim of deduction relating to employee's contribution to welfare funds which are governed by section 36(1)(va). (viii) However, the Hon'ble Delhi High Court in its judgment in the case of CIT vs. AIMIL Ltd. ( 321 ITR 508 ) while examining this issue in 2010 had held that no disallow....

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....t is reproduced as under: "In view of the judgment of the Division Bench of Delhi High Court in Commissioner of Income-Tax versus Aimil Limited, (2010) 321 ITR 508 (Del) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an 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 (EPF) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act." 8. We also take note of the plea of the assessee that delayed payment of emplo....