2024 (10) TMI 871

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....e Tribunal, Jaipur Bench, Jaipur (for short 'the Tribunal'). 2. The brief facts are that the respondent-company is engaged in distribution of electricity. The return for assessment year 2009-10 was filed and the assessment was finalized under Section 143 (3) of the Act. The two issues arose in the assessment proceedings. Firstly, can deduction be allowed if employees' share of provident fund is deposited beyond the date stipulated in the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for short 'EPF Act') and Employees' State Insurance Act, 1948 (for short 'ESI Act'). Secondly, the effect of late deposit of TDS on claiming deduction of the expenditure. 3. The appeal filed by the respondent was accepted by the Commis....

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....come Tax-1 reported as (2022) 448 ITR 518. It was held that share of the employee in the provident fund deducted by the employer, has to be deposited as per the due date fixed by the EPF Act and ESI Act concerned and not as per Section 43B of the Act. There is no leeway with the assessee in depositing of amount of employees contribution under EPF Act and ESI Act, beyond the due date as prescribed by the respective Act. It is only on the deposit in compliance with the provisions of the EPF Act and ESI Act, the retained amount is treated for deduction. The relevant portion of the judgment is quoted below:- "54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner....

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....nd deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under Section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as condition for deduction." 7. In view of the decision of the Supreme Court in the case of Checkmate (supra) the substantial questions No. 1 and 2 are answered in favour of the appellant-Department. 8. With regard to substantial question No. 3, learned counsel for the respondent submits that the question is covered by the decision of the Hig....