TaxTMI 
TaxTMI 
2023 (7) TMI 375
X X X X Extracts X X X X
X X X X Extracts X X X X
....the due date under the relevant Act and not allowable even if paid before the due date for filing of return of income?" 2. Whether on the facts and circumstances of the case, CIT(A) NFAC erred both in law and on facts in disallowing sum of Rs. 2,15,45,113/- representing Employees Stock Option Scheme expenses under section 37 of the Act." 3. The ld. DR at the outset submits that in so far as ground No. (1) is concerned the issue is squarely covered by the decision of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. Vs. CIT in Civil Appeal No. 2833 of 2016 (dated October 12, 2022) wherein the Hon'ble Supreme Court held that the employees' contribution remitted beyond the due date specified under PF and ESI Acts is not an allowable deduction. 4. On the other hand, the ld. Counsel for the assessee requests only for a direction to the Assessing Officer to verify the due dates as interpreted by the Calcutta Bench in the case of Kanoi Paper & Industries Ltd. Vs. ACIT [(2002) 75 TTJ 448 (Cal)] wherein it has been held that employer would be at liberty to make payment of the contribution within 15 days from the end of the month during which the disbursement....
X X X X Extracts X X X X
X X X X Extracts X X X X
....month. For example, payment for month of April 2019 was paid on or before 7th of May 2019. The Ld. Counsel referred to the provisions of section 36(1)(va) of the Act and submitted that employee's contribution was deposited as per the due date. prescribed under the relevant Act. The Ld. Counsel further referred to the employee provident fund scheme 1952 formulated under the provisions of the relevant Act. The relevant clause no. 38 of the scheme is reproduced as under: "38. Mode of payment of contributions. (1) The employer shall, before paying the member his wages in respect of any period or part of period for which contributons are payable, deduct the employee's contribution from his wages which together with his own contribution as well as an administrative charge of such. percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, and in respect of which provident fund contributions are payable as the Central Government may fix, he shall within fifteen days of the close of every month pay the same to the Fun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the wages/salary to the employee, then all the payment of employee's contribution are within the due date. The Ld. Counsel has provided a list of the monthly payment for provident fund and ESI, which is reproduced as under:- 4. On the contrary, the Ld. Departmental Representative (DR) submitted that the term every month' mentioned in section 38 of the employees contribution scheme 1952 should be interpreted as month for which salary/remuneration is due to the employee. He submitted that for clarification on the issue-in-dispute of term 'month', matter may be restored to the file of the Assessing Officer and he may be directed to verify the term 'month' from the respective provident fund or ESI authorities. 5. We have heard rival submission of the parties on the issue-indispute and perused the relevant material on record. The issue-indispute is in respect of employee's contribution to provident fund (PF) and employee state insurance corporation (ESIC) fund amounting to Rs. 84,43,087/- and Rs. 8,58,774/- respectively. The provisions of the Act provide for payment of the employee's contribution of PF/ESI on or before the due date pre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an artificial provision. In our view, a liberal approach has got to be made to this issue. Ultimately, therefore we reverse the order of the lower authorities and direct the assessing officer to examine whether the payments of contribution in the present case were made within 15 days (allowed with further grace period of 5 days) from the close of the respective months during which the disbursement of the salary/wages were actually made. The assessing officer should recompute the amount disallowable, if any, on the above basis and take appropriate action accordingly" 5.1 In our opinion, it will be appropriate if the term every month' specified in Provident Fund scheme, whether it is the month for which salary/wages are due or month of the payment is referred to Relevant Authorities for finding out with reference to any judicial precedent in respect of provisions of the relevant Act. Accordingly, we restored this issue back to the file of the Ld. Assessing Officer with the direction to find out from the relevant PF authorities about the term every month' as mentioned in clause 38 of the employees provident fund scheme. Similarly, he may find out from the ESI Authorit....