Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (1) TMI 138 - AT - Income TaxDelayed employees contribution to PF ESIC u/s 36(1)(va) - HELD THAT - We note that as per the provisions of section 36(1)(va) of the Act any sum received by the assessee from any his employee s towards contribution to any PF or superannuation fund or any fund set up under the provisions of Employee Estate Insurance Act, 1948 or any other fund for the welfare of such employees is allowed as an expenditure if such sum is credited by the employer to the employees account in the relevant fund or funds on or before the due date . And for the purpose of this section 36(1)(va) explanation (1) to this section provides that due date means the date by which the assessee is required as an employer to credit an employee s contribution to the employee s account in the relevant fund under any Act, rule, order or notification issued there under or under any standing order, award, contract or service or otherwise. We further find that the alleged disallowance was made as there was a delay in deposit beyond the due date provided under relevant Act which deals with PF/ESIC. But undisputedly the amount has been deposited with the relevant fund before the due date of filing the return of income u/s 139(1). DR has submitted that for the instant issue is debatable and there are various judgments against the assessee also. We, however, find that Hon'ble Supreme Court in the case of CIT vs. Vegetable Products Ltd. 1973 (1) TMI 1 - SUPREME COURT has held that if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted . We, therefore, under the given facts and circumstances of the case and taking a consistent view in light of judicial precedence or discussed above as well as the decision taken by this Tribunal in the case of M/s Industrial Filters and Fabrics Pvt. Ltd. 2018 (9) TMI 1008 - ITAT INDORE M/s Parag Fans Cooling System Pvt. Ltd. 2021 (2) TMI 425 - ITAT INDORE delete the disallowance and allow grounds raised by the assessee.
Issues:
1. Disallowance of employee's contribution to PF and ESI paid late by the appellant. 2. Confirmation of the action of determining the Total Income of the appellant by the AO. 3. Addition of employee's contribution towards Provident Fund. 4. Eligibility of the entire payment for deduction under section 37(1) of the Act. Analysis: 1. The appeals challenged the disallowance of employee's contribution to PF and ESI paid late by the appellants. The issue revolved around the timely deposit of the contributions. The CIT(A) confirmed the disallowance, leading to the appeals before the Tribunal. The Tribunal considered relevant legal provisions and past judgments to decide in favor of the appellants, emphasizing the timely deposit before the due date of filing the return of income under section 139(1) of the Act. The Tribunal relied on precedents and held that the disallowance was unjustified, ultimately allowing the appeals. 2. The second issue involved the determination of the Total Income of the appellant by the AO. The CIT(A) confirmed the action, leading to the appeal. The Tribunal analyzed the facts and legal provisions, ultimately deciding in favor of the appellant. The Tribunal emphasized the timely deposit of the employee's contributions before the due date of filing the return of income under section 139(1) of the Act, leading to the deletion of the disallowance. 3. The addition of employee's contribution towards Provident Fund was also contested in the appeals. The Tribunal considered the arguments presented by both parties and relied on legal precedents to make its decision. The Tribunal emphasized the importance of timely deposit of contributions before the due date of filing the return of income, ultimately leading to the deletion of the disallowance. 4. The eligibility of the entire payment for deduction under section 37(1) of the Act was another key issue raised in the appeals. The Tribunal analyzed the relevant legal provisions and past judgments to reach its decision. Emphasizing the timely deposit of contributions before the due date of filing the return of income, the Tribunal decided in favor of the appellants, allowing the appeals and deleting the disallowance. In conclusion, the Tribunal allowed the appeals, ruling in favor of the appellants regarding the disallowance of employee's contribution to PF and ESI, the determination of Total Income, the addition of employee's contribution towards Provident Fund, and the eligibility for deduction under section 37(1) of the Act. The Tribunal's decision was based on the timely deposit of contributions before the due date of filing the return of income, supported by legal provisions and precedents.
|