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TMI Blog2019 (11) TMI 1186X X X X Extracts X X X X X X X X Extracts X X X X ..... ployees salary is deposited before due date prescribed u/s.139(1) of 1961 Act, the deduction for same shall be allowed. As in the case of Carat Lane Trading Pvt. Ltd. [ 2017 (12) TMI 1669 - ITAT CHENNAI] we decide this issue in favour of the assessee and hold that employees contribution towards PF and ESI deducted by assessee from salaries of employees which is deposited by assessee beyond the due date prescribed under relevant statutes governing PF and ESI, but deposited prior to due date of filing of return of income u/s.139(1) of the 1961 Act shall be allowed as deduction and we direct deletion of the additions made to the income of the assessee. The assessee succeeds in its appeal filed with tribunal. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the employees to adhere to the due dates prescribed under Section 36 (1)(va) of the Act. Hence, the learned C.l.T. (Appeals) is not correct in concluding that the obligations referred to in Section 36 (1)(va) or the Explanation to this Section is not to be considered under Sec. 43B. 7. The C.l.T.(Appeals) ought to have noted that after deletion of the above cited requirement in the provisions of Section 43B, the Appellant Company would be eligible to claim deduction of the amount of Employees contributions to P.F. and E.S.I, before the due date for filing the Return of Income under Section 139(1). 8. The learned C.l.T.(Appeals) is not justified in taking a stand that the decision of the Supreme Court in the case of C.l.T. Vs Alom Extrusions (319 ITR 306) does not deal with Employees contribution which are covered under Sec. 36 (1)( a) but only deals with the retrospective amendment of Section 43B and hence the decision of the Supreme Court cannot be applied in case of P.F. and E.S.I. Employees contributions that are remitted beyond the due date specified in the respective statute. 9. On the other hand the learned Commissioner of Income-tax (Appeals) ought to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be assessed as income in the hands of assessee by invoking provisions of Section 2(24)(x) r.w.s. 36(1)(va) of the 1961 Act. It is admitted position between rival parties that an aggregate amount of ₹ 33,32,061/- was deducted by assessee on account of employees contribution towards PF and ESI from salaries of employees during previous year relevant to impugned ay , and the said amount was deposited by assessee beyond due date prescribed for deposit of PF and ESI under the relevant statutes governing PF and ESI , but however admittedly the said amount of ₹ 33,32,066/- was deposited by assessee before the due date prescribed for filing of return of income u/s 139(1) of the 1961 Act. The assessee contended before AO that as per provisions of Section 43B of the 1961 Act, since said amount was paid before the due date prescribed for filing of return of income u/s 139(1) of the 1961 Act, the said amount cannot be brought to tax in the hands of the assessee. The AO was of the view that it is only employer contribution which shall get shelter u/s 43B of the 1961 Act if the same is deposited on or before the due date prescribed for filing of return of income u/s 139(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of us being Hon'ble Judicial Member was part of the Division Bench of Chennai-tribunal which pronounced the said order. the Ld.DR, on the other hand, supported appellate order passed by learned CIT(A). 6. We have considered rival contentions and perused the material on record. We have observed that assessee is in the business of wholesale and retail trading of gold covering jewellery. We have observed that assessee had deducted PF & ESI share of employees contribution from salaries of employees to the tune of ₹33,32,061/- in aggregate during the year under consideration, which admittedly was deposited late by assessee beyond due date prescribed for deposit of PF/ESI under relevant statutes governing PF & ESI, but admittedly said amounts of employees contribution towards PF/ESI deducted by assessee from employees salaries were deposited by assessee before due date prescribed for filing of return of income u/s.139(1) of the 1961 Act. We have observed that Hon'ble Madras High Court in the case of CIT v. M/s.Industrial Security and Intelligence India Pvt. Ltd. (supra) for ay: 2003-04 and 2004-05 has held that if employees contribution of PF and ESI deducted from employees salar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of insertion of first proviso. The co-ordinate Bench of this Tribunal considering a similar issue in the case of M/s.Venkateswara Electrical Industries P. Ltd. Vs. DCIT (supra) following the decision of Hon'ble Delhi High Court in the case of CIT Vs. Amil Ltd. (321 ITR 508) held that even the employees contribution to provident fund is to be allowed as deduction if it is paid within due date for filing of return. While holding so, the Tribunal observed as under:- "6. We have heard the submissions made by the representatives of both the sides and have perused the orders of the authorities below, as well as the judgments/decisions relied on by the ld. Counsel for the assessee. It is an undisputed fact that there has been delay in remittance of employees contribution of ESI and Provident Fund in both the AYs i.e., 2008-09 & 2009-10. It is equally un-disputed that the assessee has deposited the amount towards employees contribution of ESI and Provident Fund before the due date of filing of return. The Hon'ble Delhi High Court in the case of Cit Vs. Amil Ltd., reported as 321 ITR 508 has held that if the assessee had deposited employees contribution towards Pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, both the Tax Case (Appeals) stand dismissed. No costs. Consequently, M.P.No.1 of 2015 is also dismissed." For sake of completeness , we would like to refer to decision in writ petition taken by single judge of Hon'ble Madras High Court in the case of Unifac Management Services ( India) Private Limited v. DCIT in WMP No. 6461 of 2018, while judgment dated 23.10.2018( reported in (2018) 409 ITR 225(Mad.), wherein a contrary view is taken by single judge of Hon'ble Madras High Court. This issue is not free from controversy as it is observed that different High Courts across India have taken a different view on this issue. We have also observed that Chennai-tribunal in the case of ACIT v. Carat Lane Trading Pvt. Ltd. in ITA No.213(Mds.) of 2017 vide orders dated 28.12.2017 for ay: 2012-13 reported in [2018] 89 taxmann.com 434 (Chennai-Trib.) has decided this issue in favour of the tax-payer, wherein, it has been held that employees contribution towards towards PF & ESI deducted by an employer from salaries of employees if deposited before due date prescribed for filing of return of income u/s.139(1) shall be allowed as deduction and shall not be hit by provisions of Section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to welfare funds. 4.2 The learned CIT(A) failed to appreciate that any received sum received on account of employees' contribution to Provident Fund & ESI not remitted within the due date is to be treated as the income of the assessee and taxed in his hands as per provisions of Sec.2(24)(x) of the LT. Act, 1961." 8.2 The DR assailed the order of the CIT(A) based on the assessment order and on the above grounds of appeal. Per contra, the AR submitted that the return was filed on 28.09.2012 and the remittances were made before the due date on filing return. Although, the CIT(A) deleted the disallowance based on the jurisdictional High Court decisions still the department has filed this appeal. 9. We heard the rival contentions. Since, the CIT(A) has applied the ratio of the jurisdictional High Court, his order in this regard does not require interference. The corresponding grounds of Revenue's appeal are dismissed. 10. In the result, the Revenue's appeal is dismissed." Respectfully following the aforestated decision(s) of Division Bench of Hon'ble Jurisdictional High Court in the case of Industrial Security & Intelligence India Private Limited(supra) and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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