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TMI Blog2019 (8) TMI 807X X X X Extracts X X X X X X X X Extracts X X X X ..... ployee his wages to deduct the employee's contribution along with the employer's own contribution as fixed by the Government. It is further required that he shall within fifteen days of the close of every month pay the same to the fund such contribution and administrative charges. After deducting the employee's contribution towards the funds, the same has to be deposited with the Government within fifteen days of the close of every month. Reference to fifteen days of the close of the month must be in relation to the month during which the payment of wages is to be made and corresponding liability to deduct employee's contribution to the fund arises. The expression within fifteen days of the close of every month therefore mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rises in following background. The assessee is a private limited company. For the assessment year 201314, the assessee had filed the return of income declaring total income of ₹ 65,65,980/. The return was taken in scrutiny by the Assessing Officer. In the order of assessment passed by him under section 143(3) of the Income Tax Act, 1961 ('the Act' for short) a disallowance of employees' contributions towards provident fund and ESI amounting to ₹ 1,16,87,091/was made. This was on account of the fact that the assessee though had deducted such contributions, failed to deposit the same with the statutory authorities within the due date. The Assessing Officer referred to all such deductions and late depositing the contrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibution of provident fund. Looking from this angle, there was no delay or default on the part of the present assessee. 4. In terms of section 36(1)(va) of the Act, any sum received by the assessee from any of his employees to which the provisions of section 2(24)(x) applies, would be deducted as long as such sum is credited by the assessee to the employee's account in the relevant funds on or before due date. Explanation to the said subsection provides that for the purpose of the said clause, due date means a date by which the assessee is required as an employer to credit an employee's contribution to the account in which relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and administrative charges. In terms of this provision thus, after deducting the employee's contribution towards the funds, the same has to be deposited with the Government within fifteen days of the close of every month. Reference to fifteen days of the close of the month must be in relation to the month during which the payment of wages is to be made and corresponding liability to deduct employee's contribution to the fund arises. The expression within fifteen days of the close of every month therefore must be interpreted as having reference to the close of the month, for which, the wages are required to be paid with corresponding duty to deduct employee's contribution and to deposit the same in the fund. 6. Learned counse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de delayed payment and as under Section 36(1)(va) the Employee's Contribution received by the employer is formed to be employer's income. The same is deductible only when contribution is credited by the employer to the relevant fund on or before the new date. 6. The CIT (A) did not agree with this view of the Assessing Officer and the Tribunal relying on decision of the Delhi High Court in the case of CIT Vs. P M Electronics Ltd., (2009) 177 Taxman 1 (Del.) concurred with the findings of the CIT (A). There is a long discussion on the said aspect where reliance is also placed on the judgment of the Apex Court and various other High Courts. Without further burdening this order with these judgments and its detailed discussion, suffice ..... X X X X Extracts X X X X X X X X Extracts X X X X
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