2017 (8) TMI 1740 - HC - Income Tax

Delay in contribution to provident fund U/s. 43B - amount calimed was for the preceding year and not deposited in time thus being contrary to the provisions of section 43B and 36(1) (va), 2(24)(x) - HELD THAT - In view of the proviso which is sought to be relied upon in our considered opinion, the contention which is sought to be relied upon for previous year was not based even before the CIT (Appeal) or before the Tribunal. It is made clear that if the payment is made before filing of the return of the relevant year, the assessee will be entitled for benefit under Section 43-B. Question of detailed payment under PF Act and other act is subject matter of decision of Supreme Court.

Summary

Issues:
Interpretation of Section 43B - Provident Fund Contributions

Detailed Analysis:

The judgment involves the interpretation of Section 43B regarding provident fund contributions. The appellant challenged the tribunal's decision to allow the appeal by the assessee, confirming the CIT (Appeal) order. The substantial question of law framed by the court was whether the Tribunal was justified in upholding the findings of the CIT (A) and allowing the provident fund contribution claimed for the preceding year, which was not deposited in time, contrary to the provisions of Section 43B and other relevant sections.

The appellant argued that the A.O.'s view, which disallowed the deduction for the contribution made but not deposited in time, should be upheld. The appellant contended that the provisions of Section 43B do not allow deductions for such delayed payments. On the other hand, the respondent referred to a case where the Delhi High Court held that no disallowance can be made if the contributions are paid before the due date of filing the return. The CIT (A) had deleted the disallowance of the employer's and employees' provident fund contributions based on this reasoning.

In another appeal, it was noted that a portion of the employees' contribution to the provident fund had not been paid or was paid after the prescribed time, leading to an addition to the assessee's income due to non-payment or delayed payment by the company. The respondent relied on a decision of the court where it was highlighted that the issue was pending before the Supreme Court.

The court ultimately held in favor of the assessee, subject to the pending Special Leave Petition (SLP). It was clarified that if the payment is made before filing the return of the relevant year, the assessee would be entitled to the benefit under Section 43B. The judgment emphasized that the detailed payment under the PF Act and other relevant acts is a matter for the Supreme Court to decide. The appeals were disposed of based on these considerations.