TaxTMI 
TaxTMI 
2022 (4) TMI 497
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....06.09.2021 for the Assessment Year (A.Y.) 2018-19. 2. Brief facts of the case are that the assessee, a private limited company, filed its return of income, admitting total income of Rs. 1,04,96,218/- u/s 139(1) of the Income Tax Act, 1961 (in short 'Act'), for the A.Y. 2018-19 on 29.09.2018. However, the Centralized Processing Centre (CPC) has processed the return u/s 143(1) determining the total income at Rs. 9,44,390/-. The CPC has disallowed a sum of Rs. 92,679/-, being late payment of Employee contribution of PF of Rs. 89,615/- and ESI of Rs. 3,064/-. 3. Aggrieved by the order of the CPC, the assessee filed appeal before the CIT(A) which was migrated to the NFAC in terms of notification No.76/2020 in S.O.No. 3296(E), dated 25/09/2....
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....stainable in the eyes of law as the same is passed without proper application of mind, as it is also contrary to the spirit and provisions of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). • The only dispute in this appeal is the addition of Rs. 92,679/- made by the CIT(Appeals) National faceless assessment centre, towards disallowance of employee's contribution to PF & ESI. The appellant submits that though the amount could not be paid within the due dates under the PF Act and ESI Act the same were paid before the due date of filing the return u/s 139(1) of the Act. Thus, the appellant submits that the amount is allowable u/s 43B of the Act. • The above contention of the appellant is duly sup....
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....by Finance Act, 2021 to Section 36(1)(va) of the Act is clarificatory, which clarify that the definition of 'due date' as per Section 43B of the Act and shall be deemed to have been applied for the purpose of employees contribution. 6. On the other hand, the ld. DR only relied on the order of the CIT(A) and stated that the CIT(A) has passed exhaustive order explaining all provisions of the Act. 7. We have heard rival contentions and perused the relevant material on record. Admitted facts are that the payment of PF contribution regarding employees' contribution is made within the due date of filing of return of income. The Revenue has disputed that the employees' contribution received by the assessee would be treated as income of the a....
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....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. Explanation to the said clause provides that, for the purposes of this clause, "due date‖ to mean the date by whic....
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....tressed 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 measures of penalizing employers who mis-utilize employee's contributions. Accordingly, in order to provide certainty, it is proposed to - (i) amend clause (va) of sub-section (1) of sectio....