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TMI Blog2021 (5) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... in ground no.1 and 2 is that since the employees contribution to provident fund is covered by the provisions of section 43B of the Act, therefore assessee is entitled to claim deduction. Ground no.3 raised by the assessee is not pressed. 3. When this appeal was called out for hearing, learned counsel for the assessee invited our attention to the order dated 26.12.2013 of the Jurisdictional Hon`ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation [2014] 1 TMI 502/ [41 taxmann.com 100] whereby the issue of contribution of employees towards provident fund has been adjudicated against the assessee. The Hon`ble Court held that Contribution of employees towards provident fund does not come under the purview of section 43B of the Act . 4. Learned Departmental Representative has fairly agreed with submissions made by the ld. Counsel. 5. We see no reasons to take any other view of the matter than the view so taken by the Jurisdictional Hon`ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation (supra). In this case the Hon`ble Court held as follows: 7.1 Short question which is posed for consideration of this Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation :- for the purpose 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 thereunder or under any standing order, award, contract or service or otherwise. 7.5 Another provision which is required to be considered while considering the above controversy would be Section 43B of the Act, which stood prior to the amendment of section 43B of the Act vide Finance Act, 2003 and after the amendment to Section 43B of the Act by Finance Act, 2003. Section 43B of the Act prior to the amendment of Section 43B of the Act vide Finance Act, 2003 reads as under: Provided that nothing contained in this section shall apply in relation to any sum referred to in clause (a) or clause (c) or clause (d) or clause (e) or clause (f), which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 43B is with respect to certain deductions only on actual payment. It provides that notwithstanding anything contained in any other provisions of the Act, a deduction otherwise liable under the Act in respect of (B) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him. It appears that prior to the amendment of section 43B of the Act vide Finance Act, 2003, an assessee was entitled to deductions with respect to the sum paid by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees (employer's contribution) provided such sum - employer's contribution is actually paid by the assessee on or before the due date applicable in his case for furnishing return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or before the 'due date' under the Provident Fund Act, ESI Act, Rule, Order or Notification issued thereunder or under any Standing Order, Award, Contract or Service or otherwise. It is required to be noted that as such there is no amendment in section 36(1) (va) and even explanation to section 36(1)(va) is not deleted and is still on the statute and is required to be complied with. Merely because with respect to employer's contribution Second Proviso to section 43B which provided that even with respect to employers' contribution [(section 43(B)b], assessee was required to credit amount in the relevant fund under the PF Act or any other fund for the welfare of the employees on or before the due date under the relevant Act, is deleted, it cannot be said that section 36(1)(va) is also amended and/or explanation to section 36(1)(va) has been deleted and/or amended. It is also required to be noted at this stage that as per the definition of income as per section 2(24)(x), any sum received by the assessee from his employees as contribution to any Provident Fund or Superannuation Fund or any fund set up under the provisions of ESI Act or any other fund for the we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is also required to be noted that in the case before the Hon'ble Supreme Court, the controversy was with respect to employers' contribution as per section 43(B)(b) of the Act and not with respect to employees' contribution under section 36(1)(va). Before the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. (supra) the Hon'ble Supreme Court had no occasion to consider deduction under section 36(1)(va) of the Act and with respect to employees' contribution. As stated above, the only controversy before the Hon'ble Supreme Court was with respect to amendment (deletion) of the Second Proviso to section 43(B) of the Income Tax Act, 1961 by the Finance Act, 1963 operates w.e.f. 1/4/2004 or whether it operates retrospectively w.e.f. 1/4/1988. Under the circumstances, the learned tribunal has committed an error in relying upon the decision of the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. (supra) while passing the impugned judgement and order and deleting disallowance of the respective sums being employees' contribution to PF Account / ESI Account, which were made by the AO while considering the proviso to section section 36(1) (va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act as it stands, with respect to any sum received by the assessee from any of his employees to which the provisions of clause (x) of sub-section (24) of section 2 applies, assessee shall not be entitled to deduction of such amount in computing the income referred to in section 28 if such sum is not credited by the assessee to the employees' account in the relevant fund or funds on or before the due date as per explanation to section 36(1)(va) of the Act. Merely because Second Proviso to Section 43B of the Act in which there was a reference to due date as defined in explanation below clause (va) of subsection (1) of section 36, it cannot be held that even section 36(1)(va) is amended and/or even explanation below clause (va) of sub-section (1) of section 36 is also deleted. It can be said that there was a reference to explanation below clause (va) of sub-section (1) of section 36 in second proviso of section 43B (which has been deleted by Finance Act, 2003), only for the purpose of defining due date as per explanation below clause (va) of sub-section (1) of section 36. Therefore, by deleting Second Proviso to section 43B by Finance Act, 2003, it cannot be said that S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y which the concerned assessee was required as an employer to credit employees' contribution to the employees' account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act. 9. Consequently, all these appeals are allowed and the impugned judgement and orders passed by the tribunal in deleting the disallowances made by the AO are hereby quashed and set aside and the disallowances of the respective sums with respect to the Provident Fund / ESI Fund made by the AO is hereby restored. The questions raised in present appeal are answered in favour of the revenue. With this, all these appeals are allowed. 6. As the issue is squarely covered against the assessee by the Judgment of the Jurisdictional Hon`ble Gujarat High Court in the case of CIT Vs. Gujarat State Road Transport Corporation (supra).Respectfully following the above binding precedent, we uphold the contention of the assessee and therefore we confirm the order of the ld. CIT(A). 7. In the result, the appeal filed by the assessee is dismissed. Order is pronounced on 19/10/2020, as per Rule 34 of Income Tax Appellate Tribunal, Rule 1963. - - TaxTMI - TMITax - Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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