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TMI Blog2021 (6) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Ld. CIT(A)-3, Hyderabad in appeal No. 10224/2019-20/B3/CIT(A)-3, dated 07/09/2020 passed U/s. 143(1) r.w.s 250(6) of the Act for the A.Y. 2018-19. 2. The assessee has raised three grounds in its appeal and they are extracted hereinbelow for reference:- 1. The order of the Ld. CIT(A) in confirming / sustaining the addition made towards belated payment of employee s contribution to PF and ESI amounting to ₹ 6,90,356/- is wholly unsustainable both on facts and in law. 2. The order of the Ld. CIT(A) failed to consider that the employees contribution to EPF and ESI at ₹ 6,90,356/- was duly paid before the due date of filing the return of income and thereby erred in disallowing the same. 3. Any other ground or grounds that may be urged at the time of hearing. 3. The brief facts of the case are that the assessee is a private limited company filed his return of income on 30/10/2018. Thereafter, the return was processed by the Centralised Processing Centre and the assessment was completed on 12/11/2019 wherein certain additions were made. Amongst which one of the issues was with respect to addition made for, non-remittance of employee s cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds may be deleted. The Ld. AR also relied on certain decisions of the Judiciary. The Ld. DR on the other hand vehemently argued in support of the orders of the Ld. Revenue Authorities and pleaded for confirming the same. 6. We have heard the rival submissions and carefully perused the materials on record. We do not find any merit in the submission of the assessee on this issue. Section 36(1)(va) of the Act specifically provides that if the assessee remits the employee s contribution to Provident Fund/ESI within the due date mentioned in the relevant Act P.F Act, then the deduction will be allowable. The relevant portions of Section 36(1)(va) is reproduced herein below for reference:- 36(1)(va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) 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, r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 recognized Provident Fund, Section 43B of the Act makes it clear that deduction will be allowable if the remittance is made with in the due date of filing the return of income. The Hon ble Gujarat High Court in the case CIT vs. Gujart State Road Transport Corporation reported in [2014] 366 ITR 170 (Guj.) has observed as under on the issue:- Under section 2(24)(x) of the Income Tax Act, 1961 any sum received by the assessee-employer from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of the Employees State Insurance Act, 1948, or any other fund for the welfare of such employees shall be treated as an Income . Under section 36(1)(va) the assessee shall be entitled to the deduction in computing the income referred to in section 28 with respect to any sum received by the assessee from the employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of such amount in computing the income referred in section 28 . 9. Similarly the Hon ble Kerala High Court in the case of CIT vs. Merchem Ltd reported in [2015] 378 ITR 443 (Ker) held as under:- on a reading of section 36(1)(va) of the Income Tax Act, 1961 along with section 2(24)(x), it is categoric and 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 employees contribution and the latter the employer s contribution. The assessee is entitled to get the benefit of deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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