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TMI Blog2016 (9) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... IA(4)(iv)(c) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). The case has been selected for scrutiny and accordingly, a notice u/s 143(2) of the Act was issued which was duly served upon the assessee on 16.8.2012. In response to notice, the authorized representative of the assessee appeared from time to time and furnished relevant information as called for and also produced the books of accounts and other information. During the course of assessment proceedings, the A.O. noticed that as per the enclosure to tax audit report and the documents produced for verification, there is a delay in remittances of employees' contribution to Provident fund. Therefore, issued a notice and asked to explain why said amount could not be treated as income u/s 2(24)(x) r.w.s. 36(1)(va) of the Act. In response to notice, the assessee submitted that the delay in remittances of employees contribution to Provident fund is unavoidable and reasons beyond control, such as the company is facing staff problem and also the PF authorities have introduced on line payments of PF remittances. The assessee further submitted that because of new system of online payment of PF remittances, its staff is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is paid on or before due date of furnishing return of income u/s 139(1) of the Act. The assessee further submitted that the delay in remittances of employees' contribution was due to genuine and unavoidable reason and not an intentional act on the part of the assessee. The assessee is having staff problem and also the PF authorities have introduced epayment system which was new to the assessee and assessee employees are not acquainted with the knowledge of procedure of epayment of PF. Therefore, there is a delay in remittances which cannot be considered as purposeful delay in remittances of PF contribution. The CIT(A) after considering the submissions of the assessee and also following certain judicial decisions, held that the assessee would be entitled for deduction of employees contribution to PF made before the due date of filing return of income u/s 139(1) of the Act. With these observations, Ld. CIT(A) directed the A.O. to delete the additions made towards employees' contribution to PF. Aggrieved by the CIT(A) order, the revenue is in appeal before us. 4. The Ld. D.R. submitted that the CIT(A) erred in holding that the assessee would be entitled for deduction of employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amended provisions of section 43B of the Act, any sum payable by the assessee as an employer by way of contribution to PF shall be allowed, if the same is paid on or before the due date of filing of return of income u/s 139(1) of the Act. 6. The only issue to be resolved is whether the assessee would be entitled to claim deduction for the employees' contribution made to PF after the due date prescribed under the PF Act, but before the due date prescribed for filing of income tax return in the light of the provisions contained in section 36(1)(va) of the Act and section 43B(b) of the Act. It is the contention of the assessee that there is no distinction between employer and employee contribution after omission of second proviso of section 43B of the Act by Finance Act, 2003 w.e.f. 1.4.2004. We find force in the arguments of the assessee for the reason that there is no difference between employees and employer contribution under the PF Act. Section 6 of Provident Fund Act provides for contribution and the manner in which such contribution shall be made. Paragraph 30 of the PF Scheme provides for payment of contributions. As per the said scheme, the employer at the first instance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn of income u/s 139(1) of the Act, then deduction is to be allowed under the provisions of section 43B of the Act. 8. The Hon'ble Karnataka High Court, in the case of Essae Teraoka (P) Ltd. Vs. DCIT 366 ITR 408 took the view that the word contribution occurring in section 43B of the Act would include employees' contribution to PF in the light of the definition of the word contribution as per the provisions of section 2(c) of the PF Act. As per the said section, contribution would mean both employer's contribution and employees' contribution. Accordingly, it was held that the provisions of section 43B of the Act allowing deduction for payment made before the due date of filing of Income Tax return cannot be ignored. Similarly, the ITAT, Hyderabad Tribunal in the case of Tetra Soft (India) Pvt. Ltd. Vs. ACIT (2015) 40 ITR (Trib) 470 held that when assessee remitted employees' contribution to PF within due date of filing return of income u/s 139(1) of the Act, amount of employees' contribution to PF cannot be disallowed. Similar view was upheld by the Chennai bench of the ITAT, in the case of ACIT Vs. Farida Shoes Pvt. Ltd. (2016) 46 CCH 29. The coordinate bench held that if assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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