MAX VIGIL SECURITIES PVT. LTD.,AHMEDABAD vs. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(2), AHMEDABAD

PDF · subscribers
ITA 1157/AHD/2018Status: DisposedITAT Ahmedabad07 August 2019AY 2015-163 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the disallowance, stating that deduction for employees' contribution is not allowable if not credited to the relevant fund on or before the due date, as per the Gujarat High Court's decision.

What were the facts?

The assessee delayed crediting employees' contributions to Provident Fund and ESIC beyond the due dates. The Assessing Officer disallowed the deduction for these delayed contributions.

What were the issues?

Whether delayed crediting of employees' contribution to Provident Fund and ESIC beyond the due date disentitles the assessee to claim deduction.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

Before: SHRI MAHAVIR PRASAD&SHRI AMARJIT SINGH

For Appellant: Shri Mudit Nagpal, Sr. DR
Hearing: 07/08/2019

PER AMARJIT SINGH - AM:

1.

The appeal filed by the Assessee for A.Y. 2015-16, arise from order of the CIT(A)-2, Ahmedabad dated 10.04.2018, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2.

The solitary ground of appeal of the assessee is filed against the decision of Ld. CIT(A) in confirming the addition of Rs. 2,32,54,401/- on account of delay in crediting of employees’ contribution to Provident Fund and ESIC u/s. 36(1)(va) r.w.s. 2(24)(x) of the Act made by the AO.

3. The fact in brief is that assessment u/s. 143(3) for the year under consideration was finalized on 05.05.2015. During the course of assessment the AO has noticed that Provident Fund amounting to Rs. 2,25,53,564/- and ESIC amounting to Rs. 7,00,837/-. The AO has observed that as per the provision of Sec. 36(1)(va) r.w.s. 2(24)(x) the deduction from employees’ contribution is allowable only if such sum is credited by employer to the employees’ account in the relevant fund on or before the due date. The AO has issued show-cause notice to the assessee and stated that the assessee was agreed for the proposed disallowance. Therefore, after placing reliance on the decision of Hon’ble Gujarat High Court in the case of CIT vs. Gujarat State Road Transport Corporation (Tax Appeal No. 637 of 2013), the AO has disallowed the aforesaid amount aggregating to Rs. 2,32,54,401/- and added to the total income of the assessee.

4. Aggrieved assessee has filed appeal before the Ld. CIT(A). The Ld. CIT(A) after referring the decision of Hon’ble Gujarat High Court in the case of CIT vs. GSRTC as cited above has dismissed the appeal of the assessee.

5.

We have heard the rival contention and perused the material on record. It is undisputed fact that assessee has not deposited the contribution received from the employees under the Provident Fund Act and the ESI Act within the due date as prescribed under the Provident Fund and the ESI Act amounting to Rs. 2,32,54,401/-. We consider that the Hon’ble jurisdictional High Court in the case of CIT vs. GSRTC 265 CTR 64 has held that when the employer has not credited the sum received by it as employees’ contribution to employees account in relevant fund on or before due date as prescribed in explanation to Sec. 36(1)(va) the assessee shall not be entitled to deduction. In view of the above facts and the judicial findings we upheld the decision of Ld. CIT(A). Therefore, the appeal of the assessee is dismissed.

6.

In the result, the appeal of the assessee is dismissed.

This Order pronounced in Open Court on 07/08/2019

More judgments on Section 36(1)(va)

All 6,054 judgments and leading authorities on Section 36(1)(va) →

Recent GST High Court judgments

Search GST case law →