2019 (1) TMI 1927 - AT - Income Tax

Addition u/s 2(24)(x) r.w.s. 36(1)(va) - delayed employees contribution to provident fund - Contribution received from the employees paid before due date of filing of the return - HELD THAT - As decided in M/S. EASTERN POWER DISTRIBUTION COMPANY OF A.P. LTD. AND VICA-VERSA 2016 (9) TMI 1040 - ITAT VISAKHAPATNAM we are of the view that there is no distinction between employees and employer contribution to PF and if the total contribution is deposited on or before the due date of furnishing return of income u/s 139(1) of the Act then no disallowance can be made towards employees contribution to provident fund. The CIT(A) after considering the relevant details rightly deleted the additions made by the A.O. We do not see any reasons to interfere with the order of the CIT(A). Hence we inclined to uphold the CIT(A) order and dismiss the appeal filed by the revenue

Summary

Issues Involved:
Whether the contribution received from the employees paid before the due date of filing of the return is allowable or not.

Analysis:
The appeal was against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2014-15. The Assessing Officer disallowed the remitted provident fund by the assessee as deemed income under section 2(24)(x) r.w.s. 36(1)(va) of the Act. The CIT(A) directed the Assessing Officer to allow the claim of the assessee based on a decision of a coordinate bench. The only issue was whether the contribution received from employees paid before the due date of filing the return is allowable. The ITAT, Visakhapatnam Bench in a previous case held that there is no distinction between employees' and employer's contribution to PF. Section 43B of the Act allows deductions for payment made before the due date of filing the Income Tax return. Several judicial precedents were cited supporting the deduction for employees' contribution made before the due date of filing the return. The tribunal upheld the CIT(A) order based on these precedents, dismissing the appeal by the Revenue.

In conclusion, the tribunal upheld the CIT(A) order based on the decision of a coordinate bench and various judicial precedents supporting the deduction for employees' contribution made before the due date of filing the return. The appeal by the Revenue was dismissed in favor of the assessee.