2017 (3) TMI 105 - AT - Income Tax

Deduction of contribution to EPF under section 43B - amount paid before the due date for filing the return of income - Held that - Respectfully following the decision of the Hon ble Bombay High Court in the case of CIT vs. Hindustan Organics Chemicals Ltd. (2014 (7) TMI 477 - BOMBAY HIGH COURT) we reverse the orders of the learned CIT(A) on this issue and direct the authorities below to allow the assessee s claim for deduction on account of contributions to employees provident fund (EPF) under section 43B which, admittedly, have been paid before the due date for filing the return of income for A.Y. 2012-13. Consequently, assessee s grounds of appeal allowed.

Summary

Issues:
Challenging disallowance of EPF contribution under section 43B of the Income Tax Act.

Analysis:
The appeal concerned the disallowance of EPF contribution made by the Assessing Officer (AO) on the grounds of delayed payment. The appellant contended that the EPF contribution was paid before the due date of filing the income tax return for the relevant assessment year. The primary issue was whether the disallowance of the EPF contribution was justified under section 43B of the Act.

The appellant raised specific grounds challenging the order of the CIT(A) in upholding the disallowance. The appellant argued that the issue was covered in their favor by a judgment of the Hon'ble Bombay High Court in a similar case. The appellant emphasized that the EPF contribution was paid before the due date for filing the return of income for the relevant assessment year.

The Tribunal carefully considered the arguments presented by both parties and reviewed the relevant legal provisions and judicial pronouncements. The Tribunal noted that the EPF contribution, although not paid within the specified period under the PF Act, was indeed paid before the due date for filing the income tax return for the assessment year in question. The Tribunal relied on the decision of the Hon'ble Bombay High Court in a similar case where it was held that the deduction claimed on account of EPF contribution could not have been disallowed.

The Tribunal further highlighted the amendments introduced in the Finance Act, 2003, which brought about changes in section 43B of the Act, making it clear that deductions for contributions to welfare funds were permissible if paid before the due date for filing the income tax return. The Tribunal concluded that the appellant's claim for deduction of EPF contribution under section 43B was justified based on the legal provisions and judicial precedents cited.

In light of the above analysis and following the decision of the Hon'ble Bombay High Court, the Tribunal allowed the appellant's appeal, directing the authorities to allow the claim for deduction of EPF contribution amounting to the disputed sum. As a result, the appellant's grounds of appeal were upheld, and the appeal for the relevant assessment year was allowed.

In conclusion, the Tribunal's detailed analysis and reliance on legal provisions and judicial precedents supported the appellant's position regarding the deduction of EPF contribution under section 43B of the Income Tax Act, leading to the allowance of the appeal for the assessment year in question.