Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD
Before: SHRI MAHAVIR PRASAD&SHRI AMARJIT SINGH
PER AMARJIT SINGH - AM:
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”.
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.
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.
In the result, the appeal of the assessee is dismissed.
This Order pronounced in Open Court on 07/08/2019