M/S. RADIX WEB,,AHMEDABAD vs. THE DCIT., CIRCLE-5(2),, AHMEDABAD

As the facts in all the nine appeals pertaining to ground of disallowance of employees contributions to PF/ESIC are same therefore for the sake of convenience this common ground of appeal is adjudicated after taking into consideration the facts of ITA 2250/Ahd/2017 and its findings will be applicable to nine appeals filed by different assessees as cited above in this order.

The assessee raised following ground of appeal:- ITA No. 2250/Ahd/2017 “1. The Ld. Commissioner of income Tax (Appeals)-3, Vadodara has erred in law and in facts in confirming the action of the Ld. A.O. in disallowance of Rs. 2,92,825/- being employees contribution to PF and ES1C u/s. 36(1)(va) r.w.s. 2(24)(x), on the ground that the employees' contribution towards PF collected has not been credited in the relevant fund on or before the due date even though the same has been paid within the grace period or before the due date of filing the Return of Income. The impugned disallowance of Rs. 2,92,825/- being bad in law and in facts is prayed to be allowed.”

The brief fact of the case is that during the course of appellate proceedings, it was discerned to the assessing officer that assessee has not deposited the contribution received from the employee’s contribution towards provident fund and employees state Insurance before the due date in the government account. Consequently, the assessing officer has disallowed such contribution of Rs. 2,92,825/- (PF: Rs. 2,77,435/- + ESI: 15,390/-) of the act.

Aggrieved assessee filed appeal before the ld. CIT (A). The ld. CIT A) has confirmed the disallowance made by the assessing officer after placing reliance on the judicial pronouncement of jurisdictional Hon’ble high court in the case of

We have heard the rival contentions and perused the material on record carefully. The assessee has not deposited the contribution received from the employees within the due dates as stipulated under the provident Fund Act and the ESI Act amounting to Rs. 2,92,825/-. We consider that that Hon’ble jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation 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 section 36(i)(va) the assessee shall not be entitled to deduction. In view of the above facts and the judicial findings, we uphold the decision of Ld. CIT (A). Accordingly, the appeal of the assessee is dismissed.

Assessee’s ground of appeal regarding levy of interest u/s. 234A/B/C is of general nature which is to be charged mandatory as per provision of the act. Therefore, the same is dismissed. The other ground of appeal against initiation of penalty proceedings u/s. 271C is premature which and not required any adjudication at this stage therefore the same is also dismissed.

The second ground of appeal of the assessee is against the addition of Rs. 26,076/- being expenditure incurred on earning exempt income to the book profit as the assessee was having nil income. The assessing officer has added

The second ground of appeal of the assessee is regarding confirming disallowance of Rs. 8,45,836/- u/s. 14A r.w. Rule 8D of the act. The ld. CIT(A) has dismissed the appeal of the assessee on the ground that there was delay of two months in filing the appeal by the assessee.

In the combined result, ITAs 2250, 2052, 2219, 2265, 1763, 1653, 2348, and 2479/Ahd/2017 are dismissed and ITA 2051/Ahd/2017 is partly allowed for statistical purposes.