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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI SANDEEP GOSAIN, Honble & SHRI O.P.MEENA, Honble
सुनवाईकीतारीख/ Date of hearing: 12.02.2020 उ�घोषणाक�तार�ख/Pronouncement on: 14.02.2020 आदेश /O R D E R
PER SANDEEP GOSAIN, JM:
This appeal by the Assessee is directed against the order of Ld.Commissioner of Income Tax(Appeals)-2, Surat dated 18.04.2017 for the assessment year 2014-15.
Grounds raised
by the Assessee read as under: “Lr. CIT(A) – II, Surat has erred in law and on facts to upheld addition of Rs. 11,36,461/- in respect of Employee’s PF contribution overlooking the fact that the same is already paid by the appellant before due date of filing return of income.”
3. The solitary ground raised by the assessee challenging the order passed by ld.CIT(A) in upholding the addition of Rs.11,36,461/- in respect of Employees PF contribution overlooking
Page 2 of 4 Sandeep Subhash Nanavati Vs. DCIT, Circle-1(3), Surat/ A.Y. 2014-15 the fact that the same ha already paid by the assessee before the due date of filing of return of income.
The ld.Authorised Representative(AR) appearing on behalf of the assessee reiterated the same arguments as was raised before the ld.CIT(A) and the same were contained in para no.5 of the order of the ld.CIT(A) which is reproduced below: “5. During the appellate proceedings, the A.R. of the appellant has filed written submissions and the case was heard. The appellant had submitted before the AO that section 43B of the Act provides the due date by which employers contribution to PF/ESIC etc. shall be deposited and therefore the due date which given under the provisions of section 43B of the Act is required to be seen for the purpose of making any disallowance in respect of employees contribution under the Act. The assessee has cited various judgments and contended that the provident Fund & ESIC Fund Payments made beyond due date which has been disallowed should be allowed.”
On the other hand, the ld.Departmental Representative (DR) relied upon the orders of Revenue Authorities.
We have heard both the Counsels and perused the material placed on records, judgments cited by the parties as well as orders passed by the Revenue Authorities. From the records, we noticed that during the course of assessment proceedings, the ld.Assessing Officer(AO) noticed that in some cases, employees contribution was deposited after due date, therefore, deduction of Rs.11,36,461/- was disallowed by the ld.AO in view of the provisions of section 36(1)(va) r.w.s 2(24) of the Act. However, as per the ld.Authorised Representative(AR) drawn our attention to page no.2 from the order of ld.AO, wherein the assessee had given details of the actual date of payment of employees contribution to PF. Although, employees
Page 3 of 4 Sandeep Subhash Nanavati Vs. DCIT, Circle-1(3), Surat/ A.Y. 2014-15 share of contribution to the PF has been deposited late by the assessee being employer, even if grace period allowed under the PF Act\ and the same has been shown in the table. But, according to the assessee, due date as described under the Act should be taken into consideration having regard to the month of disbursement/wages and also the grace period available under the relevant Acts. The ld.AR submitted that in the case of the assessee, the relevant due date for making payment of contribution has to be seen not with reference to the relevant months relatable to wages/salary but month of its actual disbursement. In this respect, our attention was drawn to the decision of the Co-ordinate Bench of ITAT Ahmedabad in ITA No’s.117 & 321/Ahd/2018 for A.Y. 2013-14 & 2014-15 of M/s.Roquette Riddhi Siddhi Private Ltd., Vs. DCIT, wherein it was held as under: “6. We have examined the issue towards allowability of PF & ESIC under s.36(l)(va) of the Act. We notice at the outset that the decision of the Hon'ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation 366 1TR 170 (Guj) is against the assessee on the first principles. The Hon'ble Gujarat High Court considered the question with respect to the disallowance of amount being employees' contribution to PF account/ESIC contribution, which admittedly, the assessee in that case did not deposit with the PF department/ ESIC department on or before the due date under the PF Act and/or ESI Act. However, on perusal of the orders of the lower authorities, we simultaneously observe that the assessee has tried to demonstrate that employees’ contribution to PF/ESIC has been made before the ‘due date’ as prescribed under the respective Act having regard to the month of disbursement of salary/wages and also the grace period available under the relevant Acts. It is thus broadly the case of the assessee that the relevant 'due date' for making payment of contribution has to be seen not with reference to the relevant months relatable to wages/salary but the month of its actual disbursement. Coupled with this, grace period available under the respective Act is also required to be taken into account. In this regard, we observe that the co- ordinate bench of Tribunal in Kanoi Paper & Industries Ltd. vs. ACIT 75 TTJ 448 has observed that the relevant due date in such a case is to be seen with reference to the month of the actual disbursement of wages/salaries. We also are of the view that grace period available under the respective Acts should be taken into account while computing the delay, if any.”
Page 4 of 4 Sandeep Subhash Nanavati Vs. DCIT, Circle-1(3), Surat/ A.Y. 2014-15 7. Keeping in view of the above decision and also keeping in view of the facts of the present case, in our view the matter requires verification at the end of ld.AO. With regard to the month of actual disbursement, therefore, we set-aside the order of the ld.CIT(A) and restore the matter back to the file of the ld.Assessing Officer by giving one more opportunity of being heard to the assessee and afresh decision. Keeping in view our above findings, accordingly, the solitary ground is allowed for the statistical purpose.
In the result, appeal of the Assessee is allowed for statistical purpose.
Order pronounced in the open court on 14-02-2020.