TaxTMI 
TaxTMI 
2023 (7) TMI 375
X X X X Extracts X X X X
X X X X Extracts X X X X
....ether on the facts and circumstances of the case, the Ld. CIT(A), NFAC is correct in deleting the disallowance of Rs. 1,85,73,689/- without appreciating the legal position that expenditure on account of employees contribution to PF and ESIC is not covered u/s 43B of IT Act, but is covered u/s 36(1)(va) r.w.s 2(24)(x) whereby such expenditure is allowable only if the said amounts are paid within 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....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ai Tribunal held as under:- "2. In the ground No. 1 and 2 of the appeal, the assessee is aggrieved with the disallowance upheld by the Ld. CIT (A) in respect of employee's contribution to ESI/PF, which was made by the CPC as an adjustment and further sustained in rectification order u/s 154 of the Act. The Ld. CIT(A) has upheld the disallowance in view of binding precedent of Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. v. CIT in Civil Appeal No. 2833 of 2016, observing as under: "4. Having pursued the rectification order, the grounds of appeal and the written submissions the issue of admissibility of payment of employees' contribution of SIC/PF beyond the due date as per the relevant Statute, raised thr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hall, 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 Fund by separate bank drafts or cheques on account of contributions and administrative charge:] ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....amount contributed by the employer in respect of each such member for the said period. The employer shall maintain on his record duplicate copies of the aforesaid monthly abstract and consolidated annual contribution statement for production at the time of inspection by the Inspector." 3.1 The Ld. Counsel referred to the above clause and submitted that the employer is required to deposit the PF/ESI contribution of the assessee within 15 days of the close of every month. According to the Ld. Counsel, term 'every month is the month of payment of the salary/remuneration to the employee and not the month for which salary or wages were due to the employee. He accordingly submitted that if the term 'month' is taken as the month of p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in the 15 days from the close of the month for which salary/wages of the employee is due. The Ld. Counsel has referred to the decisions of the Hon'ble Calcutta Tribunal in the case of Kanoi Paper & Industries Ltd. Vs. ACIT ITA No. 1260/Cal/1996. The relevant finding of the Tribunal is reproduced as under:- "6. Clause 38 of the Employees Provident Fund Scheme, 1952, fixes the time limit for making payment in respect of contribution to the provident fund to be 15 days from the close of the month concerned. However, the issue here is whether the "month" should be considered to be the month to which the wages relates or the month in which the actual disbursement of the wages is made, we are of the considered opinion that the expression "m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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,....