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TMI Blog2023 (5) TMI 1408X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee: Mr. Sunil Hirawat For the Revenue: Ms. Richa Gulati ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 23.08.2021 passed by the Ld. Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, Delhi [in short 'the Ld. CIT(A)'] for assessment year 2018-19. The appeal was originally adjudicated on 20.05.2022, however subsequently on the Miscellaneous Application filed by the Revenue, the appeal has been recalled by the order of the Tribunal dated 13.04.2023 passed in MA No. 405/Mum/2022, and thus this appeal came before us for hearing. The grounds raised by the assessee are reproduced as under: 1. On facts and in law, the Ld. Commissioner of Income tax Appeals (hereinafter refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties on the issue in dispute and perused the relevant material on record. The issue in dispute before us is regarding the due date before which the employee's contribution should be deposited into provident fund account. The Ld. Counsel of the assessee has referred to clause 38 of the employee's provident fund which reads that provident contribution fund are payable to central government within 15 days of the close of every month. The Ld. Counsel has referred to the decision of the Co-ordinate Bench of the Tribunal (Kolkata) Bench in the case of Kanoi Paper and Industries Ltd ACIT in ITA No. 1260/Mum/1996. The Tribunal in the case of Master Polishers (supra) has referred to the said finding. For ready reference, said finding is reproduce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution concerned within 15 days (subject however to the further grace period) from the end of the month during which the disbursement of the salary is actually made and the contribution of the, provident fund are, thus, generated, inasmuch as, the provision relating to the disallowance of such contribution on account of delay is rather an artificial provision. In our view, a liberal approach has got to be made to this issue. Ultimately, therefore, we reverse the order of the lower authorities and direct the assessing officer to examine whether the payments of contribution in the present case were made within 15 days (allowed with further grace period of 5 days) from the close of the respective months during which the disbursement of the sal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... daily, weekly, fortnightly or monthly basis. The expression "basic wages" is defined as all emoluments, which are earned by an employee while on duty or on leave or on holidays with wages in either case in accordance with the terms of the contract of employment and which are paid or payable in cash to him. 6. Para 30 of the Scheme of the Provident Fund Act imposed an obligation on the employer to remit both the shares of contributions in the first instance and para 32 empowered the employer to recover the employees' contributions from the wages of the employees. As per para 38 of the Scheme, the employer is required to remit both the contributions together with the administrative charges thereon within 15 days before the cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y month. Para 30 of the Scheme imposes an obligation on the employer to remit both the shares of contributions in the first instance and para 32 of the Scheme enables the employer to recover the employees contributions from the wages of the employees. The initial responsibility for making payment of the contributions lies on the employer irrespective of the fact whether the wages are paid in time or not. As such, the Provident Fund payments made after the due date will attract the penal damages under section 14B of the Act." The Tribunal committed serious error in coming to the contrary conclusion. Hence the first two questions of law referred to us are answered in the negative against the assessee and in favour of the revenue." ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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