THE ALWAR CENTRAL CO-OPERATIVE BANK LTD.,ALWAR vs. ACIT, ALWAR

PER SHRI KUL BHARAT, JM.

This appeal by the assessee is directed against the order of ld. CIT (A) Alwar,

dated 07.10.2016 pertaining to assessment year 2013-14. The assessee has raised

the following grounds of appeal :-

2 ITA No. 1016/JP/2016 M/s The Alwar Central Co-operative Bank Ltd.

13,82,959/- being employee’s contribution provident to PF.

scrutiny assessment and the assessment under section 143(3) of the Income Tax Act, 1961(hereinafter referred to as the Act) was framed vide order dated 5th Jan,

2016. While framing the assessment, the assessing Officer made addition on

account of investment in LIC for leave encashment of Rs. 30 lakhs. Addition on

account of interest in Income Tax refund of Rs. 22,50,035/- received by the

Assessee. The Assessing Officer made addition on interest of Rs. 2,53,682/-

received on the Income Tax Refund. Further the Assessing Officer made

disallowance of employee’s contribution towards PF on account of late payment.

Aggrieved by this, the assessee preferred an appeal before ld. CIT(A), who after

considering the submissions partly allow the appeal. Thereby, he sustained the

addition of Rs. 13,82,959/- made on account of disallowance of employees

contribution deposited as deposited late. Aggrieved by this, the assessee is in

present appeal before this Tribunal.

covered by the decisions of the Rajasthan High Court in the case of CIT Vs. State

Bank of Bikaner & Jaipur and Jaipur Vidyut Vitaran Nigam Ltd. 364 ITR 70(Raj).

3.1 On the contrary, Ld. Departmental Representatives opposed the submissions

and supported the orders of the authorities below.

3.2 We have heard the rival contention, perused the material available records

and gone through the orders of the authorities below. The Assessing Officer has

3 ITA No. 1016/JP/2016 M/s The Alwar Central Co-operative Bank Ltd.

made addition on the ground that the Central Board of Direct Taxes vide circular no.

22/2015 dated 17/12/2015 clarified that deduction is allowable to the employees

assessee if he deposit the employer contribution to welfare fund on or before the

‘due date’ of filing of return of income in view of decision Hon’ble Apex Court in the

case of CIT vs. Alom Extursions Ltd. The CBDT further clarified that this circular

does not apply to the claim of deduction relating to employee’s contribution to

welfare fund which are governed by section 36(1)(va) of the IT Act. This issue has

been decided to the jurisdictional High Court in the case of CIT Vs. State Bank of

Bikaner and Jaipur 363 ITR 70 (Raj) wherein the Hon’ble High Court as held as

under:-

“A conjoint reading of the proviso to section 43B which was inserted by the Finance Act, 1987, made effective from April 1, 1988, the words numbered a claused (a), (c), (d),(e) and (f), are omitted from the above proviso and, further more a second proviso was removed by the Finance Act, 2003, therefore, the deduction towards the employer’s contribution, if paid, prior to due date of filing of the return can be claimed by the assessee. In our view, the Explanation appended to section 36(1)(va) of the Act further envisage that the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that section 43B starts with a notwithstanding clause and would thus override section 36(1)(va) and if read in isolation section 43B would become obsolete. Accordingly, contention of counsel for the Revenue is not tenable for the reason aforesaid that deductions our of the gross income or payment of tax at the time of submission of return under section 139 is permissible only if the statutory liability of payment of PF or other contribution referred to in clause (b) are paid within the due date under the respective enactments by the assessee and not under the due date of filing of return.” Respectfully followings the judgment of Hon’ble Jurisdictional High Court, we direct

the Assessing Officer to delete the disallowance.

4 ITA No. 1016/JP/2016 M/s The Alwar Central Co-operative Bank Ltd.

Order pronounced in the open court on 08 /03/2017.

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vkns'kkuqlkj@ By order,

सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत