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TMI Blog2021 (10) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... ber For the Assessee : Shri C.Subrahmanyam, FCA For the Department : Shri V.Srinivasa Rao, Sr.DR ORDER PER BENCH These appeals have been preferred by the Assessee against the separate orders dated 02/03/2021 impugned herein passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [for short, ld. Commissioner (NFAC) ], Delhi u/sec. 250 of the Income Tax Act, 1961 (hereinafter referred to as Act ) for the A.Ys. 2019-20 2016-17. As the issue involved in both the appeals is common, therefore for the sake of convenience and brevity have been taken into consideration simultaneously and hence we will quote the facts of ITA No. 25/VIZ/2021 and result of the same shall apply mutatis mutandis to both appeals. Brief facts of the case are as under:- 2. The Assessee being a Co-operative society engaged in manufacturing and sale of sugar, filed its return of income on dated 31/10/2019 for which assessment u/sec. 143(1) of the Act was completed on dated 16/09/2020 by assessing loss of ₹ 10,34,34,964/-. The assessing officer made the addition of ₹ 1,19,93,542/- as delayed payment qua employees share of ESI and PF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T. Act. 3. The Ld. CIT(A), NFAC ought to have held that PF contribution of Employees if paid within the due date of filing of return of income is allowable for deduction in view of the provisions of sec. 36(1)(va) and sec. 43B of the I.T. Act. 4. The Ld. CIT(A), NFAC before giving the verdict on the disputed issue failed to discuss/consider the various submissions made by the Assessee on dt. 27/01/2021. This way the order passed by Ld. CIT(A), NFAC is one sided and against all judicial norms. 5. The Ld. CIT(A), NFAC failed to adhere to the judicial discipline as laid down by the Hon'ble Bombay and Andhra Pradesh High Courts, reported in 156 ITR 11 169 ITR 564 respectively, for the proposition that when there are several judgments of different Hon'ble High Courts both in favour and against the Assessee the view favourable to the Assessee is to be followed. 6. For these and other reasons that are to be urged at the time of hearing of the case the appellant prays that the impugned disputed addition is to be deleted in the interest of justice. 5. Having heard the parties at length and perused the material available on record. The issue involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an be made towards employees contribution to provident fund. For the sake of brevity and ready reference, the concluding part of the order is reproduced herein below:- 5. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The A.O. made additions towards belated payment of employees contributions to PF. According to the A.O., employees contribution to provident fund is deductible under the provisions of section 36(1)(va) of the Act, if the same is paid on or before the due date specified under the provident fund Act. The A.O. further was of the opinion that in view of the clear provisions of section 2(24)(x) r.w.s. 36(1)(va) of the Act, any recovery from employees towards provident fund contribution is deemed to be income of the assessee, if the employer not paid the same to the provident fund account of the employee within due date specified under the provisions of PF Act. It is the contention of the assessee that second proviso to section 43B of the Act provides that no deduction shall be allowed unless such sum is actually been paid on or before due date as specified in explanation to 36(1)(va) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erence between employee and employer contribution. If the legislature intends to differentiate employees and employer contribution, then there would have been two due dates like in the case of Income Tax Act. Therefore, from the above, it is clear that the Provident Fund Act does not differentiate employees and employer contribution and contribution means both employees and employer contribution under the PF scheme. 7. Section 43B of the Act provides for certain deductions to be allowed only on actual payment basis. Sub clause (b) of section 43B of the Act covers 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. The proviso to section provides that any sum paid by the assessee on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made under the provisions of section 43B of the Act. A careful consideration of section 43B of the Act, it is clear that an extension is granted to the assessee to make the payment of PF contributions or any other fund till the due date of furnishing return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la, in the case of CIT vs. Merchem Ltd, reported in (2015) 378 ITR 443 and submitted that employees contribution to provident fund is allowed as deduction, if the same is deposited on or before the due date specified under the provisions of provident fund Act. The D.R. also relied upon the decision of Gujarat High Court, reported in (2014) 366 ITR 170, wherein the Hon ble Gujarat High Court held that since assessee had not deposited said contribution to respective fund account on the date as prescribed in explanation to section 36(1)(va) of the Act, disallowance made by the A.O. was just and proper. Though, the D.R. relied upon certain judicial precedents which are in favour of the revenue, in view of the decision of Hon ble Supreme Court, in the case of CIT Vs. M/s. Vegetables Products Ltd. reported in 88 ITR 192, wherein the Hon ble Supreme Court held that if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted, therefore, by respectfully following the decision of Supreme Court, when divergent views are expressed by different judicial forums, we prefer to follow the views expressed by the Courts which are in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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