2017 (11) TMI 1810 - AT - Income Tax

Addition u/s 43B - delay in remitting the employees contribution to Provident Fund (PF) accounts - assessee remitted the employees contribution beyond the due date specified u/s 36(1)(v) - HELD THAT -As decided in M/S. EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD. AND VICA-VERSA 2016 (9) TMI 1040 - ITAT VISAKHAPATNAM the employees contribution to PF required to be allowed even if the same is paid before the due date of filing the return u/s 139(1) of the Act. - Decided issue in favour of assessee.

Summary

Issues Involved:
Appeal against order of CIT(A) related to addition u/s 36(1)(va) of Income Tax Act, 1961 for assessment year 2012-13.

Analysis:
The appeal filed by the revenue challenges the addition u/s 36(1)(va) of the Income Tax Act, 1961, regarding the Employees' contribution to Provident Fund not paid before the due date. The Assessing Officer (A.O.) observed that the Employee's contribution for a specific month was not paid on time, leading to its treatment as the assessee's income u/s 2(24)(x) of the Act. The CIT(A) allowed the appeal of the assessee citing precedents like EPDC of AP Ltd. and court decisions like CIT Vs. Alom Extrusions Ltd. and CIT Vs. Kichha Sugar Co. Ltd.

The Tribunal noted that the issue was previously addressed in the case of ACIT Vs. M/s. Eastern Power Distribution Company of AP Ltd., where the appeal of the assessee was allowed. The Tribunal emphasized that if the total contribution is deposited before the due date of filing the return of income u/s 139(1) of the Act, no disallowance can be made towards employees' contribution to provident fund. Consequently, the Tribunal upheld the order of the CIT(A) and allowed the appeal of the assessee based on the previous decision.

In line with the precedent set by the Tribunal, the current Tribunal upheld the order of the CIT(A) and allowed the appeal of the assessee. The decision was made based on the consistency with the earlier ruling and the principle that timely deposit of the total contribution precludes disallowance of employees' contribution to provident fund. The judgment was pronounced on 15th Nov'17, affirming the decision in favor of the assessee.