9911796707
TMI Blog2021 (4) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) has erred in upholding the order of the Ld. AO who had denied the deduction of Rs. 1,25,482/- and Rs. 76,805/- for the AYs 2017-18 and 2018-19 respectively being the employee's contribution towards Provident Fund as the same was not paid within the due date under the relevant Act." 3. The brief facts of the case are that the assessee is an LLP filed its returns of income on 19/10/2018 & 11/10/2018 for the AY 2017-18 and 2018-19 respectively and the returns were processed U/s. 143(1) of the Act wherein deduction of Rs. 1,25,482/- and Rs. 76,805/- for the AYs 2017-18 and 2018-19 respectively was denied to the assessee being the employee's contribution towards Provident Fund which was paid beyond the due date as specified in the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation:- For the purposes of this clause, "due date" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued there-under or under any standing order, award, contract of service or otherwise; 7. Further Section 43B of the Act, only provides that deduction will be allowed with respect to employer's contribution to provident fund if the same is remitted within the due date of filing the return of income. The relevant portion of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyer into the Government treasury, they are separate and distinct for which independent provisions have been cast under the Act. Employee's contribution to P.F./ESI, is nothing but appropriation of a portion of the salary which is legitimately due to the employee and remitted by the employer in the Government treasury on behalf of the employee in accordance with the provisions of the relevant P.F., Act. Hence it is crystal clear from Section 36(1)(va) of the Act that with respect to remittance of employee's contribution to recognized Provident Fund/ESI, deduction will be allowable to the assessee only if the same is remitted within the due date mentioned in the relevant P.F. Act and with respect to employer's contribution to rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deductions only on actual payment. The deletion of the second proviso to section 43B and the amendment in the first proviso to section 43B alone and the deletion of the second proviso to section 43B by the amendment pursuant to the Finance Act, 2003, cannot be made applicable with respect to section 36(1)(va) of the Act. Therefore, with respect to any sum with respect to the employees' contribution as mentioned in section 36(1)(va) of the Act, the assessee shall be entitled to the deduction of such sum towards the employees' contribution if it is deposited in the accounts of the concerned employees and in the concerned fund such as provident fund, employees' State insurance contribution fund etc., provided the sum is credited by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd clear that the contribution received by the assessee from the employees alone was treated as income for the purpose of section 36(1)(va) and therefore, the assessee is entitled to get deduction for the sum received by the assessee from his employees towards contribution to the fund or funds so mentioned only if, the amount was credited by the assessee on or before the due date to the employees account in the relevant fund as provided under Explanation to section 36(1)(va) of the Act. So far as the section 43(b) is concerned, it takes care of only the contribution payable by the employer or the assessee to the respective funds. Therefore, sections 36(1)(va) and 43B(b) operate in different fields, i.e., the former takes care of the employe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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