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TMI Blog2021 (9) TMI 1350X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that employees contribution to PF and ESI was added to the total income and additions made u/s 143(1) are debatable issues, hence, the same cannot be made addition u/s 143(1) of the Act. Further, the assessee argued before the CIT(A) that the assessee has paid the employees contribution to PF and ESI after the due date under the respective Acts, but before the due date for filing the return of income and hence requested to delete the addition. The assessee relied on the decision of ITAT, Visakhapatnam in the case of APEPDCL in ITA No.609/Viz/2014 dated 29.07.2016. However, the Ld.CIT(A) held that the employees contribution towards P.F and ESI are covered by the section 36(1)(va) of the Act, which required to be paid before the due date under the specified Acts and non payment of PF, ESI before the due date specified under respective Acts disentitle the assessee for deduction under I.T.Act. Accordingly, held that there is no case for application of section 43B and relied on the decision in the case of CIT Vs. Gujarat State Road Transport Corporation (2014) 41 taxmann.com 100 and held that there is no mistake in the intimation passed u/s 143(1), accordingly dismissed the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, we hold that the addition made by the CPC u/s 143(1) is unsustainable, accordingly deleted. The appeal of the assessee is allowed. 5. On merits also, this Tribunal has consistently viewed that the employees contribution to PF and ESI is allowable deduction if the same is paid before the due date of filing the return of income. In the case of APEPDCL in I.T.A.No.609/V/2014 dated 29.07.2016, the coordinate bench of ITAT, Visakhapatnam after considering the decision of Hon'ble Karnataka High Court in the case of Essae Teraoka (P) Ltd. Vs. DCIT 366 ITR 408 and the decision of coordinate bench of ITAT Hyderabad in the case of Tetra Soft (India) Pvt. Ltd. Vs. ACIT (2015) 40 ITR (Trib) 470 and also taking support from the decision of Hon'ble Supreme Court in the case of CIT Vs. M/s Vegetables Products Ltd., 88 ITR 192, decided the issue in favour of the assessee. For the sake of clarity and convenience, we extract para No.5 to 10 which reads as under: "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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wages paid to the employee. Therefore, as per the PF Act and scheme of contributions, the contributions means and include both employees' and employer's share. Similarly, section 2(c) of the Provident Fund Act defines the contribution to mean a contribution payable in respect of a member under the scheme or the contribution payable in respect of an employee to whom the scheme applies. There is a prescribed mode of payment of contributions under the PF Act. Under the said Act, the employer shall contribute both employees and employer share along with administrative charges before the due date specified under the PF Act. The Act prescribed only one due date for depositing the contribution i.e. 15th of subsequent month with the grace period of 5 days which indicates that there is no difference 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 43B of the Act. In the case of CIT Vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 35 Taxman 616, the Hon'ble High Court of Rajasthan, after referring to the apex court decision in the case of CIT Vs. Alom Extrusions Ltd. 319 ITR 306 & CIT Vs. Vinay Cement Ltd. held that the deductions should be allowed for the payment of employees' contribution made before the due date of filing of return. Similarly, in the case of CIT Vs. State Bank of Bikaner, the Hon'ble Rajasthan High Court held that contribution paid after the due date under the respective Act, but before filing the return of income u/s 139(1) of the Act cannot be disallowed u/s 43B of the Act and or u/s 36(1)(va) of the Act. 9. The Ld. D.R. relied upon the decision of Hon'ble High Court of Kerala, 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 as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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