M/S SATYA PRAKASH BUILDERS LTD, PARISHRAM MADAN MAHAL,JABALPUR vs. ASSTT COMMISSIONER OF INCOME TAX, CIRCLE 2(1), JABALPUR

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ITA 42/JAB/2023Status: DisposedITAT Jabalpur22 September 2023AY 2017-183 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that employee's contribution to ESI/PF paid after the due date is not allowable as deduction. However, employer's contribution paid after the due date but before the due date of filing the return of income is allowable under Section 43B of the Act. The issue was restored to the AO for fresh decision.

What were the facts?

The assessee claimed deduction for payments of Provident Fund (PF) and Employees' State Insurance (ESI) made after the due dates prescribed by the respective Acts but before the filing of the income tax return. The Assessing Officer disallowed this deduction.

What were the issues?

Whether employer's contribution to PF/ESI paid after the statutory due date but before the due date of filing the return of income is allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 43B,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JABALPUR BENCH, JABALPUR

For Appellant: Shri H.S.Modh, Adv
For Respondent: Shri Saad Kidwai, CIT DR
Hearing: 20/09/2023Pronounced: 22/09/2023

O R D E R PER OM PRAKASH KANT, A.M.: This appeal by the assessee is directed against the order dated 16.02.2023 passed by Ld. Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “Ld.CIT(A)”] for assessment year 2017-18, raising following grounds of appeal:-

1. “That the CIT (A) has grossly erred in facts and R circumstances of the case to confirm the addition of Rs. 3,69,249/- considering that the payment of Provident Fund and ESI has been made after due date but before filing of income tax return.

Satya Prakash Builders Ltd. Vs ACIT 2. That the addition confirmed for Rs. 3,69,249/- on account of delayed payment of Provident Fund and ESI is arbitrary and bad in law.

3. That the Assessee crave leaves to raise any other ground/s on or before the date of hearing to prove that the order is bad.”

2.

We have heard Ld. Authorized Representatives of the parties on the issue in dispute and perused the relevant material available on record. In the case the issue in dispute is regarding the deduction for employees state insurance (“ESI”)/ provident fund (“PF”) deposited after due date prescribed under the relevant Acts. Before us, Ld. Counsel for the assessee submitted that amount disallowed by the Assessing Officer (in short “AO”) also included employer’s contribution to ESI/PF which is eligible under the provision of section 43B of the Income Tax Act, 1961 (in short “the Act”) if paid on or before the due date of the filing of the return of income.

3.

We find that as far as employee’s contribution to the ESI/PF paid after due date under the relevant Act, is not allowable as deduction u/s 36(1)(va) of the Act. However, the employer’s contribution to ESI/PF paid after due date under the relevant Act is allowed if same is paid before the due date of filing of the return of income for the year under consideration as per section 43B of the Satya Prakash Builders Ltd. Vs ACIT Act. Accordingly, we restore the issue in dispute involved in the appeal back to the AO for deciding afresh in accordance with law. Thus, grounds raised by the assessee are allowed for statistical purposes.

4.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

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