2022 (2) TMI 492 - AT - Income Tax

Employees contribution to Provident Fund and ESIC u/s 2(24)(x) r.w.s 36(1)(va) - HELD THAT - It is an undisputed fact that though there has been delay in deposit of PF/ESI dues but it is also an undisputed fact that money collected from employees, have been deposited with the appropriate authorities before filing of return of income. As in case Bharat Hotels 2018 (9) TMI 798 - DELHI HIGH COURT has decided the issue in favour of the assessee - no disallowance u/s 36(1)(va) of the Act is called for in the present case. - Decided in favour of assessee.

Summary

Issues:
1. Disallowance of employees' contribution to Provident Fund and ESIC.
2. Determination of Gross Total Income by the Assessing Officer.

Issue 1: Disallowance of employees' contribution to Provident Fund and ESIC:
The appeal concerns the addition of ?21,96,923 on account of delay in depositing employees' contributions to Provident Fund and ESIC under section 36(1)(va) of the Income Tax Act, 1961. The appellant argued that the contributions were paid before the due date of filing the income tax return and should not have been disallowed. The CIT(A) upheld the disallowance, citing the specific provisions of the Employees' Provident Funds Act and ESI Act. The appellant relied on various judgments, including those of the Delhi High Court, to support their case. The Tribunal analyzed the amended provisions of the Income Tax Act and clarified that deductions under section 36(1)(va) are not allowable if payments are made beyond the due dates prescribed by the respective statutes. The Tribunal referred to relevant case laws and directed the Assessing Officer to delete the disallowance, thereby allowing the appeal.

Issue 2: Determination of Gross Total Income by the Assessing Officer:
The Assessing Officer determined the Gross Total Income at ?47,62,390, whereas the appellant declared ?25,65,467 as per the return of income. The appellant contended that the Assessing Officer should have accepted the income as per the return. However, since the detailed reasons provided in the appeal's other grounds were dismissed, the Tribunal upheld the Assessing Officer's determination of the Gross Total Income. The appellant's request to add, alter, or amend the grounds of appeal was also dismissed as no changes were made. Consequently, this issue was resolved in favor of the Assessing Officer's determination.

In conclusion, the Tribunal allowed the appeal regarding the disallowance of employees' contribution to Provident Fund and ESIC, directing the Assessing Officer to delete the disallowance. However, the determination of Gross Total Income by the Assessing Officer was upheld based on the grounds presented in the appeal.