2018 (8) TMI 511 - AT - Income Tax

Disallowing employee s contribution towards PF and ESIC u/s 36(1)(va) r.w.s.2(24)(x) - Held that - AR before us has submitted that the due date for depositing the employee s contribution towards PF/ESI should be seen from the date of the payment and not from the due date. In this regard, we note that the Jurisdictional Tribunal in the identical facts and circumstance in the case of Suzlon Energy Ltd.(supra) has restored this issue to the file of the AO for fresh adjudication. Respectfully following the same we are inclined to restore the issue on hand to the file of AO for fresh adjudication and in accordance to the provision of law as well as after considering the order of this Tribunal in the case of Suzlon Energy Ltd. (Supra). Thus, the ground of appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
1. Disallowance of employee's contribution towards PF and ESIC under section 36(1)(va) r.w.s.2(24)(x) of the Income Tax Act.

Analysis:
The appeal was filed by the Assessee against the order of the Commissioner of Income Tax(Appeals) confirming the disallowance of employee's contribution towards PF and ESIC under section 36(1)(va) r.w.s.2(24)(x) of the Act. The Assessee contended that the due date for depositing the contribution should be considered from the date of payment, not the due date. The Assessee relied on the judgment of the Hon'ble Gujarat High Court and a Tribunal order in a similar case. The Assessee requested the matter to be restored to the AO for fresh adjudication. The Department argued that the disallowance should be based on the due date as per the Payment of Wages Act, 1936. The Tribunal noted the delay in payment by the Assessee and the previous decisions, including the Gujarat High Court judgment, and decided to restore the issue to the AO for fresh adjudication. The appeal of the Assessee was allowed for statistical purposes.

The key contention revolved around the interpretation of the due date for depositing employee's contribution towards PF and ESIC. The Assessee argued for considering the due date from the date of payment, while the Department emphasized the due date as per the Payment of Wages Act, 1936. The Tribunal, in line with previous decisions and the Assessee's submissions, decided to restore the issue to the AO for fresh adjudication. The Tribunal highlighted the importance of adhering to legal provisions and previous judgments in determining the disallowance of contributions. The decision aimed to ensure a fair and comprehensive assessment of the matter based on legal principles and precedents.