2024 (11) TMI 1613

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....4, which has been filed against the intimation u/s 143(1) of the Act. 2. The grounds of appeal raised by the assessee are reproduced as under: "1. For that confirmation of ESI and EPF expenses disallowance by the Ld. NFAC claimed by the assessee on employees contribution u/s 36(1)(va) in its return of income 139(1) and disallowed by the Ld. ADIT, CPC u/s 154 for belated payments is bad in law and unjust. 2. For that assessee has nothing to dispute regarding the disallowances of belated payments of ESI and EPF in view of settled legal position by the Hon'ble Apex court except about the two particulars payments on dt. 17.11.2020 in the tabulated list recorded at the appellate order which are within the due date as per set....

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....he return of income u/s 139(1). Against the said order, the assessee filed a rectification application u/s 154 of the Act. However, the same was not allowed/considered vide order dated 10.02.2023, which was contested before the Ld. CIT(A) but the assessee could not succeed. Hence, the assessee is in appeal before the Tribunal. 4. We have heard the rival contentions and perused the documents available on record. The ld. DR relied upon the order of the lower authorities. 5. During the course of the appeal before us, the ld. AR stated that the payments in respect of the employees' contribution to Provident Fund and ESI payments were made as under which details also appear at page 9 of the appellate order of the Ld. CIT(A): EPFO MON....

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.... claimed in return in schedule Ol and audit report. The appellant has not adduced any evidence as to whether at all any objections were raised by them towards such communication by CPC prior to making such adjustment. When the appellant himself has failed to substantiate the grounds raised by them, the action of the CPC in making such adjustments therefore cannot be disputed on this account. Nevertheless, the admitted position therefore is that the said amounts were not remitted before the due date as prescribed in the concerned Act. As per the appellant's submission, the ambit of section 143(1) is very limited. In this regard, since the assessee has pointed out questions about the status and significance of tax audit report it....

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....ber, 2020 [which is erroneously mentioned as May, 20 in the order of the Ld. CIT(A)] were paid in time, therefore, the same were allowable as a deduction as according to Section 38 of the PF Act, 1952, the due date is to be reckoned from the month in which salary is paid and not from the month for which the salary is due. Since the salary for October, 20 was paid in the month of November, the payment made on 17.11.2020 for amounts of Rs. 6,09,233/- and Rs. 46,787/- respectively was allowable as a deduction. He placed reliance on the decision of the Coordinate Benches in the case of Kanoi Paper & Industries Ltd. vs. ACIT reported in (2022) 75 TTJ (CAL) 448 as well as the in the case of The Master Polishers vs. ADIT in ITA No. 252/MUM/2023 or....

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.... {Emphasis supplied} 6.2. Thus, as per the Scheme of EPF, the liability of deposit of EPF arises on payment of salary/wages to the employee and as the disbursement is made in the next month and was made in the month of November, 2020, the due date of deposit was 15th December, 2020 and therefore, the payment made on 17.11.2020 was within time and, therefore, allowable u/s 36(1)(va) of the Act. Similar finding was also made by the Coordinate Benches in the case of Kanoi Paper & Industries Ltd. (supra) and The Master Polishers (supra). Hence, Ground nos. 2 & 3 of the appeal are allowed and the Ld. AO is directed to allow deduction of Rs. 6,09,233/- and 46,787/- for EPFO and ESIC respectively relating to the payment of salary/wages for t....