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TMI Blog2015 (8) TMI 1537X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment order is not erroneous and prejudicial to the interests of the Revenue in so far as allowing of deduction of employees contribution to P.F. is concerned. Accordingly, we set aside the order passed by the Pr. CIT-II under section 263 and restore that of the Assessing Officer. Appeal of the assessee is allowed. - ITA. No. 620/Hyd/2015 - - - Dated:- 26-8-2015 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER For the Assessee : Mr. V. Raghavendra Rao For the Revenue : Mr. T. Venkat Reddy ORDER PER SMT. P. MADHAVI DEVI, J.M. This appeal filed by the assessee is directed against the order passed by the Principal CIT-II, Hyderabad dated 3003.2015 passed under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ght forward losses and computed the taxable income at ₹ 2,91,79,390. 3. By virtue of the powers vested in him under section 263 of the I.T. Act, 1961, the Pr. CIT-II, Hyderabad issued notice under section 263 to revise the assessment order passed by the A.O., by stating that it is erroneous and prejudicial to the interests of the Revenue in so far as allowing of deduction of employees contribution to P.F. even though it was remitted to the Government account after the due dates. In response to the show cause notice, the assessee s Authorised Representative Mr. DiwakarAtluri, C.A. attended and filed written submissions. After considering the submissions of the assessee, the Pr. CIT-II has passed the order and directed the A.O. to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only, when the payments are made within the due date under the respective acts. The Pr. CIT-II distinguished the provisions of section 36(1)(va) and the provisions of section 43B. According to him, employees contributions are covered under section 36(1)(va) and employer s contributions are covered under section 43B of the I.T. Act, 1961. Therefore, the Pr. CIT-II was of the view that if employees contributions are not deposited within the due date as specified under the P.F. Act, it is not allowable as business deduction under section 36(1)(va). We do not agree with this opinion of the Pr. CIT-II, for the reason that there is no difference between employees and employers contributions under the P.F. Act. Section 6 of PF Act provides for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontribution means both employees and employers contribution under the scheme. 7. Section 43B of the I.T. Act provides for certain deductions to be allowed only on actual payment basis. Sub clause (b) of section 43B covers any sum payable by the assessee as an employer by way of contribution to any P.F. or superannuation fund or gratuity fund or any other fund for the welfare of the employees. The proviso to the section provides that any sum paid by the assessee on or before the due date of furnishing the return of income under section 139(1), then no disallowance can be made under section 43B. On careful consideration of section 43B, it is clear that an extension is granted to the assessee to make the payment of P.F. contributions or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the PF Act/PF Scheme/ESI Act, for not depositing the contribution on or before the due dates therein. 16. In the present case, admittedly, though the employer did not deposit the contribution, within the stipulated time, as contemplated by paragraph-30 of the PF Scheme or before the due date under the provisions of the PF scheme/Act, he deposited the contribution to the PF/ESI fund before the due date contemplated under Section 139(1) of the Act. 17. Section 6 of the PF Act provides for contributions and matters which may be provided for in Schemes. Paragraph-29 of the PF Scheme states what is Contribution . The expression contribution is also defined under the PF Act by Section 2(c) of the PF Act, which means a contributio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ESI Act within fifteen days of the closure of every month pay. It is clear that the word contribution used in Clause(b) of Section 43-B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under sub-section(1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 8. A similar issue had come up for consideration before the Coordinate Bench of this Tribunal in the case of Imerys Ceramics (India) P. Ltd., ITA.No.43/Hyd/2010 wherein the Coordinate Bench has decided the issue in favour of the assessee. 9. In the present case on hand, the contributions are not deposited as prescribed unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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