2019 (5) TMI 13 - AT - Income Tax

Addition of employee s contribution to Provident Fund u/s 36(1)(va) - sum was paid before the due date of submission of return u/s 139(1) but after the due date of payment as per respective Acts - HELD THAT - This issue is covered in favour of the assessee by the various decisions of the Hon ble jurisdictional High Court including the decision in case of CIT vs. State Bank of Bikaner Jaipur 2014 (5) TMI 222 - RAJASTHAN HIGH COURT as well as decision in case of CIT vs. Jaipur Vidyut Vitran Nigam Ltd. 2014 (1) TMI 1085 - RAJASTHAN HIGH COURT and in case of CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 2014 (8) TMI 677 - RAJASTHAN HIGH COURT . This issue is decided in favour of the assessee and against the Revenue. Hence, disallowances/additions made by the AO on account of employees contribution to PF ESI are hereby deleted. - Appeal of the assessee is allowed.

Summary

Issues: Disallowance of employees' contribution to PF and ESI

Analysis:

1. Disallowance of Employees' Contribution to PF and ESI:
The appeal was filed against the order of the ld. CIT(A)-1, Jaipur for the Assessment Year 2014-15 regarding the disallowance of employees' contribution to Provident Fund (PF) and Employee State Insurance (ESI) amounting to ?21,90,249 under section 36(1)(va). The contribution was paid within the due date of filing the return of income but after the due date of payment as per the respective Acts. The assessee contended that various decisions of the Hon'ble jurisdictional High Court supported their case, including the cases of CIT vs. State Bank of Bikaner & Jaipur and CIT vs. Jaipur Vidyut Vitran Nigam Ltd. The ld. CIT(A) sustained the disallowance made by the AO, misunderstanding the decision of the Hon'ble Jurisdictional High Court in a specific case. However, it was clarified that the decision was in favor of the assessee, and any further appeal to the Hon'ble Supreme Court would allow the Department to recover the amount if the decision favored them. Considering the series of decisions in favor of the assessee and the dismissal of a related SLP by the Hon'ble Supreme Court, the Tribunal decided in favor of the assessee and deleted the disallowances/additions made by the AO on account of employees' contribution to PF & ESI.

Conclusion:
The Tribunal allowed the appeal of the assessee, emphasizing the legal precedents and the misunderstanding by the ld. CIT(A) regarding the decision of the Hon'ble Jurisdictional High Court. The disallowances/additions made by the AO were deleted, and the appeal was decided in favor of the assessee.