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Issues involved: Interpretation of deduction for EPF & ESI contributions u/s 36(1)(va) and applicability of section 43B.
The Appellate Tribunal ITAT, Hyderabad, in the case of an appeal by the Revenue against the order of the CIT(A)-IV, Hyderabad, dated 18/01/2013 for assessment year 2008-09, addressed the substantive ground raised by the revenue regarding the allowability of the assessee's contribution towards EPF & ESI as deduction. The Assessing Officer disallowed the PF & ESI remittances due to a delay in payment, which was contested by the assessee citing timely payment before the due date for filing the return of income. The CIT(A) relied on judicial precedents and allowed the deduction, leading to the revenue's appeal before the ITAT. The ITAT considered various judicial precedents, including decisions in cases such as CIT & Anr. Vs. Desh Rakshak Aushdhalaya Ltd. and CIT Vs. Lakhani Rubber Works, to determine the issue. The Hon'ble Delhi High Court's ruling in CIT VS. AIMIL Ltd. & Ors. [(2010) 321 ITR 508 (Del)] was highlighted, emphasizing that no disallowance can be made if the employees' share of contribution is paid before the due date of filing the return u/s 139(1) of the Income-tax Act, 1961. Ultimately, the ITAT upheld the CIT(A)'s decision in allowing the deduction for EPF & ESI contributions, stating that the payment towards employees' contribution on account of PF & ESI cannot be disallowed if made before the due date of filing the return. Consequently, the appeal of the revenue was dismissed, and the order was pronounced on 10/07/2013 after the conclusion of the hearing.
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