2019 (1) TMI 1064 - AT - Income Tax

Addition u/s 43B - deduction for the employees contribution made to PF after the due date prescribed under the PF Act - Held that - There is no distinction between employees and employer contribution to PF, and if the total contribution is deposited on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made towards employees contribution to provident fund. The CIT(A) after considering the relevant details rightly deleted the additions made by the A.O. We do not see any reasons to interfere with the order of the CIT(A). Hence, we inclined to uphold the CIT(A) order and dismiss the appeal filed by the revenue - Decided in favour of assessee.

Summary

Issues:
1. Delay in filing the appeal by the Revenue.
2. Disallowance of employees' contribution to PF & ESI by the Assessing Officer.
3. Allowability of contribution received from employees paid before the due date of filing the return.
4. Interpretation of provisions under section 36(1)(va) and section 43B of the Act regarding employees' contribution to PF.
5. Comparison of judicial precedents favoring the revenue and the assessee.

Analysis:
1. The judgment addresses a delay of 18 days in filing the appeal by the Revenue. The Tribunal, after reviewing the petition and affidavit explaining the reasons for the delay, condoned the delay, allowing the appeal to proceed.
2. The Assessing Officer disallowed employees' contribution to PF & ESI due to belated remittance by the assessee. This disallowance was based on the failure to remit the amounts within the prescribed due date, treating it as deemed income of the assessee under relevant sections of the Act.
3. The issue of whether the contribution received from employees, paid before the due date of filing the return, is allowable was central to the appeal. The CIT(A) considered the explanation of the assessee and the decision of the ITAT in a similar case, ultimately deleting the addition made by the Assessing Officer.
4. The Tribunal analyzed the provisions of section 36(1)(va) and section 43B of the Act concerning employees' contribution to PF. It emphasized that if the total contribution is deposited before the due date of filing the return, no disallowance can be made, highlighting the lack of distinction between employees' and employer contribution under the PF Act.
5. By comparing various judicial precedents, the Tribunal favored the interpretation that supports the assessee, citing decisions where deductions were allowed for employees' contribution made before the due date of filing the return. This approach was in line with the principle that when two reasonable constructions of a taxing provision are possible, the one favoring the assessee should be adopted.

Overall, the Tribunal dismissed the appeal by the Revenue, upholding the decision of the CIT(A) based on the interpretation of relevant provisions and judicial precedents supporting the allowance of employees' contribution to PF if paid before the due date of filing the return.