TaxTMI 
TaxTMI 
2025 (6) TMI 1117
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....ent of employees' contribution towards provident fund. Similarly, the CPC disallowed an amount of Rs. 1,64,120/- out of Rs. 2,28,590/- against the payment of employees contribution towards superannuation fund. A rectification application filed by the assessee was dismissed by the CPC. 3. In appeal, the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee by observing as under: "4. I have considered the facts and circumstances of the case and the submission of the appellant as well as grounds of appeal Since there are divergent views in this matter, the whole issue becomes contentious This cannot therefore, be said that there is an apparent mistake that had crept in the Order, It has been held by Hon'ble Supreme Court in Review Petition (Civil) no. 1620 of 2023 in Civil appeal no.1661 of 2020 in the case of Sanjay Kumar Agarwal vs State Tax Officer that an error which is not self-evident and has to be detected by a process of reasoning, cannot be said to be an error apparent on the face of record and that an error on the face of record must be such an error which, mere looking at the record should strike and it should not require any long-drawn process of reasoning on....
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....aising the following grounds: 1. Disallowance under section 36(1)(va) amounting to Rs. 64,469/- against late payment of Employees Contribution towards Provident Fund as per CPC order: (a) On the facts and in the circumstances of the case, the Commissioner of Income Tax (Appeals) legally erred in upholding the disallowance of Rs. 64,469/- made by the Asstt. Director of Income Tax, CPC under section 36(1)(va) of the Income Tax Act without appreciating that no such disallowance was warranted on the facts of the case. (b) On the facts and in the circumstances of the case, the ld, CIT(A) erred in not appreciating that there was a small delay in making payment of employees contribution to PF for the month of April, 2020 since the Company's operations were located at Pune, which place was severely hit by corona virus pandemic and hence, the delay caused due to corona pandemic was to be ignored and the disallowance made u/s. 36(1)(va) may kindly be deleted. 2. Disallowance under section 36(1)(va) amounting to Rs. 1,64,120/- against payment of Employees Contribution towards Superannuation Fund as per CPC order: (a) On the facts and in the circumstances of the case, the Commiss....
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.... Jewels Pvt. Ltd. vs. CPC (supra), has deleted the addition. He accordingly submitted that the disallowance made by the CPC and upheld by the Ld. CIT(A) / NFAC being not in accordance with law has to be deleted. 7. The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC. 8. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that due to delay in depositing the employees' contribution towards PF amounting to Rs. 64,469/-, the CPC disallowed the same. A rectification application filed by the assessee was rejected by the CPC and on appeal, the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the Ld. Counsel for the assessee that the delay in depositing the same has occurred due to the lockdown prevailing at that time and therefore, the addition is not sustainable in view of the decisions of the Mumbai Bench of ....
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....te establishments, and hospitality services closed 3. Phase 2 15 April-3 May 2020 (19 days) Restrictions similar to Phase 1 Allowed: Farming operation, some industries, movement of cargo 4. Phase 3 4-17 May 2020 (14 days) Cities classified into three zones (Red, Orange, and Green). Relaxation of rules in the Green and Orange zones. Allowed: Activities permitted during Phase 2 and construction activities and movement of vehicles for selected activities. Restrictions similar to Phase1 applied in The Red zones 5. Phase 4 18-31 May 2020 (14 days) Allowed: Movement of vehicles without any Special conditions along with the opening of the industry 7.2. We have perused the afore stated circular issued by EPF Organisation according to which delay in deposit of contributions during the lockdown period is without mens rea of the employer and such delay cannot be attributed to any culpable state of mind of the employer and therefore does not attract penal provisions of section 14B of the EPF Act. It is stated in this circular that for any delay in payment of any contributions or administrative charges due for any period during the lockdown, no proceeding would be initiated ....
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....uction under Section 36 in the relevant assessment order, though the assessee might have deposited the employees‟ contribution on or before the due date of filing of the return under Section 139 of the IT Act." 8.2. Hon'ble Court in para 35 and 52 took note of the memorandum explaining the provisions in the Finance Bill, 1987 through which section 2(24)(x), section 36(1)(va) and second proviso to section 43B were introduced. It was observed that "these provisions were introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods." 8.3. According to the Hon'ble Court, "the essential character of an employees‟ contribution is that it is part of the employees‟ income, held in trust by the employer and needs to be deposited on or before the due date under the relevant Act. These have to be deposited in terms of such welfare enactments. They are others‟ income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law." Thus, the essential condition for claim of deduction to....
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.... assessee is allowed." 10. Similar view has been taken by the Chandigarh Bench of the Tribunal in the case of Ethos Limited vs. DCIT (supra). Since the facts of the instant case are identical to the facts before the Mumbai Bench of the Tribunal in the case of Diamour Jewels Pvt. Ltd. vs. CPC (supra), therefore, respectfully following the same, we delete the addition so made on account of delay in deposit of employees' contribution to PF/ESI. The first issue raised in the grounds of appeal is accordingly allowed. 11. So far as the second issue is concerned, the same relates to the order of Ld. CIT(A) / NFAC in confirming the disallowance of Rs. 1,64,120/- u/s 36(1)(va) of the Act on account of payment of employees' contribution to superannuation fund as per the CPC order. 12. The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the following five entries as per page 9 of the paper book and submitted that the assessee has in fact paid the amounts prior to the due date and therefore, the CPC was not justified in making the addition and the Ld. CIT(A) / NFAC was not justified in sustaining such addition. Superannuation Fund Rs.32,824 31-Oct-2019 ....