9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (8) TMI 1537 - AT - Income TaxRevision u/s 263 by CIT - delayed contribution of employees contribution to P.F. - HELD THAT - As contributions are not deposited as prescribed under the P.F. Act., but the payments are made before the due date of furnishing the return under section 139(1) as required by law under section 43B. Therefore, we are of the opinion that the case on hand is squarely covered by the decision of Essae Teraoka P. Ltd. 2014 (3) TMI 386 - KARNATAKA HIGH COURT and also case of Imerys Ceramics (India) P. Ltd 2012 (7) TMI 699 - ITAT, HYDERABAD Respectfully following the above decisions, we are of the opinion that the assessment order is not erroneous and prejudicial to the interests of the Revenue in so far as allowing of deduction of employees contribution to P.F. is concerned. Accordingly, we set aside the order passed by the Pr. CIT-II under section 263 and restore that of the Assessing Officer. Appeal of the assessee is allowed.
Issues Involved:
- Revision of assessment order under section 263 of the Income Tax Act, 1961. - Allowability of deduction for employees' contribution to P.F. - Interpretation of sections 36(1)(va) and 43B of the Income Tax Act, 1961. Detailed Analysis: Revision of Assessment Order under Section 263: The appeal was against the order passed by the Principal CIT-II, Hyderabad under section 263 of the Income Tax Act, 1961 for the assessment year 2010-2011. The Principal CIT-II issued a notice to revise the assessment order, citing it as erroneous and prejudicial to the Revenue's interests due to the allowance of deduction for employees' contribution to P.F. The assessee challenged this revision, arguing that the order was not erroneous or prejudicial. Allowability of Deduction for Employees' Contribution to P.F.: The dispute centered on whether the employees' P.F. contributions, paid before the due date for filing the return of income under section 139(1) of the Income Tax Act, were allowable as deductions under section 43B. The assessee contended that such payments were within the prescribed timeline and should be deductible. The Principal CIT-II disagreed, distinguishing between employees' and employers' contributions under the P.F. Act. However, the Tribunal found that there was no distinction between the two contributions under the Act, as both were required to be paid before the due date specified under the Act. Interpretation of Sections 36(1)(va) and 43B: The Tribunal analyzed sections 36(1)(va) and 43B of the Income Tax Act, emphasizing that section 43B allows deductions on an actual payment basis, with an extension granted to make P.F. contributions before the due date for filing the return of income. Referring to judgments by various High Courts, including the Karnataka High Court, the Tribunal concluded that there was no difference between employees' and employers' contributions to P.F. under section 43B. Therefore, the Tribunal held that the assessment order was not erroneous or prejudicial to the Revenue's interests in allowing the deduction for employees' contribution to P.F. In conclusion, the Tribunal allowed the appeal, setting aside the order passed by the Principal CIT-II under section 263 and restoring that of the Assessing Officer. The decision was based on the interpretation of relevant provisions of the Income Tax Act and judicial precedents supporting the allowance of deductions for timely employees' contributions to P.F.
|
