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TMI Blog2022 (4) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... 2018-19. 2. Brief facts of the case are that the assessee, a private limited company, filed its return of income, admitting total income of Rs. 1,04,96,218/- u/s 139(1) of the Income Tax Act, 1961 (in short 'Act'), for the A.Y. 2018-19 on 29.09.2018. However, the Centralized Processing Centre (CPC) has processed the return u/s 143(1) determining the total income at Rs. 9,44,390/-. The CPC has disallowed a sum of Rs. 92,679/-, being late payment of Employee contribution of PF of Rs. 89,615/- and ESI of Rs. 3,064/-. 3. Aggrieved by the order of the CPC, the assessee filed appeal before the CIT(A) which was migrated to the NFAC in terms of notification No.76/2020 in S.O.No. 3296(E), dated 25/09/2020 from CBDT. The CIT(A) held that the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per application of mind, as it is also contrary to the spirit and provisions of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). * The only dispute in this appeal is the addition of Rs. 92,679/- made by the CIT(Appeals) National faceless assessment centre, towards disallowance of employee's contribution to PF & ESI. The appellant submits that though the amount could not be paid within the due dates under the PF Act and ESI Act the same were paid before the due date of filing the return u/s 139(1) of the Act. Thus, the appellant submits that the amount is allowable u/s 43B of the Act. * The above contention of the appellant is duly supported by the jurisdictional ITAT Order dt.20.09.2017 of the hon'ble ITAT, Visak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the definition of 'due date' as per Section 43B of the Act and shall be deemed to have been applied for the purpose of employees contribution. 6. On the other hand, the ld. DR only relied on the order of the CIT(A) and stated that the CIT(A) has passed exhaustive order explaining all provisions of the Act. 7. We have heard rival contentions and perused the relevant material on record. Admitted facts are that the payment of PF contribution regarding employees' contribution is made within the due date of filing of return of income. The Revenue has disputed that the employees' contribution received by the assessee would be treated as income of the assessee because the same has not been deposited in the Government account within the due dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other deductions. Sub-section (1) of the said section provides for various deductions allowed while computing the income under the head 'Profits and gains of business or profession'. Clause (va) of the said sub-section provides for deduction of 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 to the said clause provides that, for the purposes of this clause, "due date‖ to mean the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s contribution towards welfare funds. Employee's contribution is employee own money and the employer deposits this contribution on behalf of the employee in fiduciary capacity. By late deposit of employee contribution, the employers get unjustly enriched by keeping the money belonging to the employees. Clause (va) of sub-section (1) of Section 36 of the Act was inserted to the Act vide Finance Act 1987 as measures of penalizing employers who mis-utilize employee's contributions. Accordingly, in order to provide certainty, it is proposed to - (i) amend clause (va) of sub-section (1) of section 36 of the Act by inserting another explanation to the said clause to clarify that the provision of section 43B does not apply and deemed to never ..... X X X X Extracts X X X X X X X X Extracts X X X X
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