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2019 (7) TMI 171 - AT - Income TaxDeduction u/s 43B - employees contribution to PF beyond the due date prescribed under the provisions of Employees Provident Fund Miscellaneous Act but such payment has been remitted on or before due date of filing return of income u/s 139(1) - HELD THAT - CIT(A), after considering the fact that the payments have been made before filing return of income u/s 139(1) by following the decision of CIT vs Alom Extrusions Ltd 2009 (11) TMI 27 - SUPREME COURT and also the decision of Hon ble Bombay High Court in the case of CIT vs Ghatgepatil Transport Ltd 2014 (10) TMI 402 - BOMBAY HIGH COURT and held that if employees contribution to PF is remitted on or before due date of filing return of income u/s 139(1), then such payment needs to be considered on par with employer s contribution to PF; consequently, section 43B is applicable and hence, any payment is made on or before due date of filing return of income, then the same is allowable u/s 43B. Facts remain unchanged. The revenue fails to bring on record any contrary decision to controvert the findings of fact recorded by CIT(A) in the light of decision of Hon ble Bombay High Court in the case of CIT vs Ghatgepatil Transport Ltd (supra). Therefore, we are inclined to uphold the findings of CIT(A) and dismiss appeal filed by the revenue.
Issues Involved:
1. Whether the CIT(A) was justified in deleting the addition made by the AO concerning the delayed payment of employees' contribution to the provident fund under section 2(24)(x) read with section 36(1)(va) of the Income Tax Act, 1961. Detailed Analysis: Issue 1: Deletion of Addition for Delayed Payment of Employees' Contribution to Provident Fund The revenue challenged the CIT(A)'s decision to delete the addition made by the AO, which considered the income received from employees, amounting to ?48,01,342/-, as non-deductible due to delayed deposit under section 2(24)(x) read with section 36(1)(va) of the Income Tax Act, 1961. Facts of the Case: The assessee, engaged in manufacturing PVC pipes and other products, filed its return of income for AY 2014-15 declaring a total income of ?1,44,22,116. The AO completed the assessment determining the total income at ?1,92,23,460, which included an addition for delayed payment of employees' contribution to the provident fund. CIT(A) Appeal: The assessee appealed to the CIT(A), arguing that although there was a delay in remittance, the contributions were paid before the due date for filing the return of income under section 139(1). The assessee cited the Supreme Court decision in CIT vs Alom Extrusions Ltd (2009) and the Bombay High Court decision in CIT vs Ghatgepatil Transport Ltd (368 ITR 749). CIT(A) Decision: The CIT(A) considered the relevant submissions and relied on the Supreme Court's decision in Alom Extrusions Ltd and the Bombay High Court's decision in Ghatgepatil Transport Ltd. The CIT(A) found that both employees' and employer's contributions are covered under section 43B, and the amendments introduced by the Finance Act, 2003, which are retrospective, apply to the case. Thus, the CIT(A) deleted the addition made by the AO. Revenue's Argument: The revenue argued that the CIT(A) erred in deleting the addition, emphasizing that if the employees' contribution is not remitted on or before the due date prescribed under the respective Act, it constitutes income under section 2(24)(x) and cannot be allowed as a deduction under section 43B. Assessee's Argument: The assessee maintained that the issue is covered by the Bombay High Court's decision in Ghatgepatil Transport Ltd, which, following the Supreme Court's decision in Alom Extrusions Ltd, held that section 43B applies to both employees' and employer's contributions if paid before the due date for filing the return of income under section 139(1). Tribunal's Analysis: The Tribunal reviewed the facts and the CIT(A)'s findings, noting there was no dispute that the contributions were paid before the due date for filing the return of income under section 139(1). The Tribunal upheld the CIT(A)'s decision, emphasizing the binding judgments of the Supreme Court and the Bombay High Court, which support the view that payments made before the due date for filing the return are allowable under section 43B. Conclusion: The Tribunal dismissed the revenue's appeal, affirming that the CIT(A) correctly deleted the addition since the employees' contribution to the provident fund, paid before the due date for filing the return, is allowable under section 43B. Order: The appeal filed by the revenue is dismissed.
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