9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1366 - AT - Income TaxAdditions u/s 43B - delay in deposit of Employees Contribution of ESI and EPF - allowable deduction under s. 36(I)(va) read with sec. 2(24(x) and sec. 43B - Held that - It is apparent that the ld. CIT(A) has given the reason for upholding the disallowances that no proof of deposit was produced by the assessee whereas the Assessing Officer itself has not disputed the factual position of making the payments by the assessee as reproduced in the assessment order and quoted in the foregoing paragraph of this order. Hence, even if there was no appearance by the assessee before the ld. CIT(A) and the appeal was decided on merits then the ld. CIT(A) was not expected to ignore the admitted facts as recorded in the assessment order. Decided in favor of assessee.
Issues:
- Disallowance of delayed deposit of Employees Contribution of ESI and EPF - Interpretation of provisions under s. 36(1)(va), sec. 2(24)(x), and sec. 43B of the Income Tax Act - Impact of decisions by various High Courts and the Supreme Court on delayed payments Issue 1: Disallowance of delayed deposit of Employees Contribution of ESI and EPF The Assessing Officer disallowed the delayed payments made by the assessee towards PF and ESI contributions, even though the payments were made before the due date for filing the return of income under section 139(1) of the Income Tax Act. The Assessing Officer relied on the fact that the payments were not made within the period stipulated by the EPF scheme and ESI Act. The disallowed amounts were Rs. 169,854 for EPF and Rs. 123,378 for ESI. The Assessing Officer also mentioned that the issue had been decided in favor of the assessee by the Jurisdictional High Court in a previous case, but since the revenue had challenged this decision in the Supreme Court, the disallowance was made to keep the issue alive. Issue 2: Interpretation of provisions under s. 36(1)(va), sec. 2(24)(x), and sec. 43B of the Income Tax Act The assessee argued that the delayed payments of employees' contribution to PF and ESI should be allowed under s. 36(1)(va) read with sec. 2(24)(x) and sec. 43B of the Act. They relied on decisions by various High Courts and the Supreme Court, emphasizing that payments made before the due date for filing the return of income should be considered allowable. The omission of the first proviso to section 43B of the Act by the Finance Act 2003 was also highlighted, indicating retrospective application from April 1, 1988. Issue 3: Impact of decisions by various High Courts and the Supreme Court on delayed payments The CIT(A) upheld the disallowances due to the absence of proof of deposit provided by the assessee during the appellate proceedings. However, the Assessing Officer did not dispute the fact that all payments were made before the due date for filing the return of income. The Tribunal set aside the orders of the authorities below, emphasizing that the appellate authority should not ignore admitted facts, especially when the Assessing Officer did not challenge the payments made by the assessee. The Tribunal allowed the claim of the assessee, citing decisions by the Jurisdictional High Court and emphasizing the importance of maintaining judicial discipline regardless of the stakes involved in the case. In conclusion, the Tribunal allowed the appeal of the assessee, emphasizing the importance of considering timely payments made before the due date for filing the return of income, as per the provisions of the Income Tax Act and relevant judicial decisions.
|
