THE ITO, WARD-1(2)(1), VADODARA vs. SAMSHERBHAI DADUBHAI CHAUHAN, VADODARA

O R D E R

PER P.M. JAGTAP, VICE-PRESIDENT :

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of the amount of Rs.2,64,40,660/- made u/s 2(24)(x) r.w.s. 36(1)(va) of the Act, on account of delay in depositing the amount of Employees contribution towards PF/ESIC after the due date prescribed under the relevant Act.

2. The solitary grievance raised by the Revenue by way of this appeal is that the learned CIT(A) has erred in deleting the addition of Rs.2,64,40,660/-, which was added by the Assessing Officer with the aid of Section 36(1)(va) of the Income-tax Act, 1961 [“the Act” in short], for the late payment of Employees’ Contribution to PF/ESI.

7.12 Now, so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Sarabhai Sons Ltd. (supra), by the learned counsel appearing on behalf of the assessee and his submission that if two views are possible and different High Courts have taken a particular view, this Court may not take a different view, is concerned, we are of the opinion that in the present case, and as discussed hereinabove, only one view is possible as canvassed on behalf of the revenue and as observed by under section hereinabove and we are not in agreement with the view taken by the Himachal Pradesh High Court; Karnataka High Court; Rajasthan High Court and Punjab and Haryana High Court in the cases refereed to hereinabove, and therefore, the submission made on behalf of the assessee to follow the decisions of the different High Courts refereed to hereinabove and/or not to take a contrary view cannot be accepted. ITO Vs. Samsherbhai Dadubhai Chauhan AY : 2018-19 3 8.00 In view of the above and for the reasons stated above, and considering section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause (x) of clause 24 of section 2, it is held that with respect to the sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees' account in the relevant fund or funds on or before the due date" mentioned in explanation to section 36(1)(va). Consequently, it is held that the learned tribunal has erred in deleting respective disallowances being employees' contribution to PF Account / ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees' accounts in the relevant fund or funds (in the present case Provident Fund and/or ESI Fund) on or before the due date as per the explanation to section 36(1)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees' contribution to the employees' account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act.”

As the issue involved in the present case as well as all the material facts relevant thereto are similar to the case of Gujarat State Road Transport Corporation (supra), we, respectfully following the decision of Hon’ble jurisdictional High Court rendered in the said case, set aside the impugned order of the learned CIT(A) deleting the disallowance made by the Assessing Officer under Section 36(1)(va) of the Act on account of belated payment of employees’ contribution towards Provident Fund/ESI and confirm the order of the Assessing Officer.

Order pronounced in the open Court on 28th September, 2022 at Ahmedabad. (SIDDHARTHA NAUTIYAL) VICE-PRESIDENT Ahmedabad, Dated 28/09/2022 *Bt ITO Vs. Samsherbhai Dadubhai Chauhan AY : 2018-19 4