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TMI Blog2014 (2) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ment services and outsourcing contractors. The respondent is a regular income tax assessee. The respondent filed its returns of income for the assessment year 2006-07. Proceedings were initiated under Section 143(3) of the Income Tax Act, 1961 (for short, hereinafter referred to as 'the Act') in respect of delayed remittances of ESI / PF contributions deducted from various employees and remitted late to the respective authorities. The assessing authorities, after hearing the assessee, concluded the assessment by an order dated 29.8.2008 and disallowed and amount of Rs. 22,91,791/- on the ground of delayed remittance. The assessee did not file any appeal. He filed an application under Section 264 of the Act before the Commissioner, pleading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requires to be set aside. 4. Per contra, learned counsel for the assessee submitted that the word 'deduction' used in Section 43B as any sum payable by the assessee as an employer by way of contribution to any provident fund. Referring to the provisions of the Employees' Provident Funds Scheme, 1952, in particular, Sections 29 and 30, he submitted, the employer shall, in the first instance, pay, both the contribution payable by himself and also on behalf of the member employed by him. Therefore, the words 'payable by the assessee as an employer by way of contribution to any provident fund' includes both employer's and employee's contribution. That is why, the Division Bench of this Court, in the aforesaid SABARI's case, granted relief, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable to each employee to whom the Scheme applies: [Provided that the above rate of contribution shall be [twelve] per cent in respect of any establishment or class of establishments which the Central Government may specify in the Official Gazette from time to time under the first proviso to sub-section (1) of section 6 of the Act.] (2) The contribution payable by the employee under the Scheme shall be equal to the contribution payable by the employer in respect of such employee: [Provided that in respect of any employee to whom the Scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding [ten per cent] or [twelve per cent], as the case may be, of his basic wages ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to as the employer's contribution) and also administrative charges. (3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges. [Explanation: For the purposes of this paragraph the expression "administrative charges" means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, as the Central Government may, in consultation with the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, is treated as the income of the employer, and the employer by contributing can get the deduction. That payment must be made within the due date i.e. the due date prescribed under Section 139(1) of the Act. Because it was causing lot of problem as discussed in the judgment of the Apex Court, on a representation made by the industry, subsequent amendment was carried out to mitigate the difficulties caused to the employer under Section 43B of the Act. Though such contributions are not paid within the time prescribed under the relevant act, if those contributions are paid before the due date prescribed under Section 139(1) of the Act, the employer shall be entitled to the deductions as provided under Section 36(1) of the Act. While extendin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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