2022 (2) TMI 570 - AT - Income Tax

Delayed employees' contribution to PF - amount not paid before the due date as provided u/s. 36(1)(va) - HELD THAT - The issue has been settled that if the assessee has paid the PF and ESI payments before the due date of filing of return income u/s. 139(1) of the Act, no disallowance is warranted as held in case of VALUE MOMENTUM SOFTWARE SERVICES PRIVATE LIMITED 2021 (5) TMI 989 - ITAT HYDERABAD . Thus we direct the AO to delete the addition made towards employees PF contribution and confirmed by the ld. CIT (A) on this issue and accordingly, the grounds raised by the assessee on this issue is allowed.

Summary

Issues Involved:
Addition of employees' contribution to PF made after the due date under section 36(1)(va) of the Income Tax Act, 1961.

Analysis:

Issue 1: Addition of employees' contribution to PF made after the due date under section 36(1)(va) of the Income Tax Act, 1961.

The appeal was against the CIT(A)'s National Faceless Appeal Centre (NFAC) order for AY 2019-20 regarding the addition of ?1,30,255 towards employees' contribution to PF made after the due date specified under section 36(1)(va) of the Act. The CIT(A) had confirmed the disallowance made by the Assessing Officer (AO).

Upon review, it was argued that the employees' contribution to PF was paid after the due date but before the due date of filing the return of income under section 139(1) of the Act. Reference was made to a previous judgment by the ITAT Hyderabad in a similar case where it was held that if the PF and ESI payments were made before the due date of filing the return of income, no disallowance was warranted. The Tribunal, in line with the earlier judgment, directed the AO to delete the addition of ?1,30,255 towards employees' PF contribution, thereby allowing the appeal of the assessee.

In conclusion, the Tribunal ruled in favor of the assessee, emphasizing that as long as the PF and ESI payments were made before the due date of filing the return of income under section 139(1) of the Act, no disallowance should be imposed under section 36(1)(va). The decision was based on precedent and the interpretation of relevant provisions of the Income Tax Act.

This detailed analysis clarifies the judgment's context, the arguments presented, and the Tribunal's decision on the issue of employees' contribution to PF made after the due date as per section 36(1)(va) of the Income Tax Act, 1961.