2015 (1) TMI 1069 - HC - Income Tax

Disallowance u/s. 43B(b) - due date for payment of employers contributions to PF etc. not to be reckoned with reference to date of actual payment of salaries/wages but with reference to close of the concerned month to which salaries/wages pertain - Held that - Tribunal was not justified in coming to the conclusion that payment of employer s contribution to P.F., ESI etc is not to be reckoned with reference to date of disbursement or payment of salaries/wages but with reference to close of the month to which salaries/wages pertain. See Commissioner of Income Tax Vs. Alom Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT - Decided in favour of assessee

Summary

Issues:
1. Interpretation of due date for payment of employer's contributions to PF for disallowance under section 43B(b) of the IT Act, 1961.
2. Applicability of Supreme Court decision in Commissioner of Income Tax Vs. Alom Extrusions Ltd. to the present case.

Issue 1: Interpretation of Due Date for Payment of Employer's Contributions to PF:

The case involved an appeal against the order of the Income Tax Appellate Tribunal regarding the due date for payment of employer's contributions to PF for the purpose of disallowance under section 43B(b) of the IT Act, 1961. The Tribunal held that the due date should be considered with reference to the close of the month to which salaries/wages pertain, not the actual payment date. The assessee contended that this interpretation was incorrect, citing the decision of the Supreme Court in Commissioner of Income Tax Vs. Alom Extrusions Ltd. The High Court, after considering the arguments, disagreed with the Tribunal's interpretation. It referenced a previous judgment in a similar case and the Supreme Court decision, emphasizing that the due date should be reckoned with reference to the actual payment date, not the month-end. The Court concluded that the Tribunal was not justified in its interpretation, and the appeals were allowed in favor of the assessee.

Issue 2: Applicability of Supreme Court Decision in Commissioner of Income Tax Vs. Alom Extrusions Ltd.:

The assessee's advocate relied on the Supreme Court decision in Commissioner of Income Tax Vs. Alom Extrusions Ltd. to support the contention that the due date for payment of employer's contributions to PF should be based on the actual payment date, not the month-end. The Court acknowledged the relevance of this decision and applied its principles to the present case. It highlighted that the Supreme Court's ruling emphasized retrospective application of the relevant provisions to ensure fairness and adherence to the legislative intent. By aligning with the Supreme Court's interpretation, the High Court concluded that the Tribunal's decision was incorrect and ruled in favor of the assessee based on the established legal principles and precedents.

This detailed analysis of the judgment highlights the key issues, arguments presented, relevant legal precedents, and the High Court's decision in favor of the assessee based on the interpretation of the due date for payment of employer's contributions to PF under section 43B(b) of the IT Act, 1961.