S.M.APPARELS PVT LTD.,CHENNAI vs. ACIT COMPANY CIRCLE VI(1), CHENNAI

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ITA 682/CHNY/2019Status: DisposedITAT Chennai09 July 2019AY 2008-093 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that payments made before the filing of the return of income under Section 139(1) are allowable. Therefore, the disallowance of employees' contribution to PF and ESI was not justified.

What were the facts?

The assessee made payments of employees' contribution to Provident Fund and ESI. The entire payment was made before the due date of filing the return of income under Section 139(1) of the Act, with a few payments delayed by only two or three days.

What were the issues?

The key issue was whether the disallowance of employees' contribution to Provident Fund and ESI was justified when payments were made before the due date of filing the return of income.

Which sections of the Income-tax Act were involved?

Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘C’ SMC BENCH, CHENNAI

Before: SHRI N.R.S. GANESAN

For Respondent: Shri Sanath Kumar Raha, JCIT
Hearing: 04.07.2019Pronounced: 09.07.2019

आदेश /O R D E R

1.

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) -16, Chennai, dated 22.01.2019 and pertains to assessment year 2008-09.

2.

The only issue arises for consideration is disallowance of employees’ contribution to the Provident Fund and ESI.

3.

Having heard the Ld. representative for the assessee and the Ld. Departmental Representative, This Tribunal finds that there is no dispute that the entire payment of employees’ contribution was made before the date of filing of return of income under Section 139(1) of the Income-tax Act, 1961 (in short 'the Act'). In fact, majority of payment was made before the due date prescribed under the relevant statutes. Few payments were made with a delay of two or three days as prescribed under the relevant statutes. In view of the judgment of Madras High Court in CIT v. Industrial Security and Intelligence India (P.) Ltd. in TC(A). No.585 & 586 of 2015, the payment made before the filing of return of income under Section 139(1) of the Act has to be allowed. Therefore, this Tribunal is unable to uphold the orders of the authorities below.

Accordingly, orders of both the authorities below are set aside and the Assessing Officer is directed to allow the payment made by the assessee towards employees’ contribution to Provident Fund and ESI before filing of return of income under Section 139(1) of the Act.

4.

In the result, the appeal filed by the assessee is allowed.

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