DELHI WATCH MARKETING P.LTD,NEW DELHI vs. DCIT, CIRCLE-7(1), NEW DELHI

The only issue raised in this appeal is against the confirmation of disallowance of Rs.4,72,722/- and Rs.16,075/-, being, the employee’s share of Provident Fund contribution and ESI contribution deposited after the due date under the respective Acts, but, within the time allowed for filing the return of income u/s 139(1) of the Act.

I have heard the rival submissions and perused the relevant material on record. I find that the issue raised in the instant appeal is no more res integra. The Hon’ble Supreme Court in the case of CIT v. Alom Extrusions Limited [(2009) 319 ITR 306 (SC)] has held that the amendment to first proviso and omission of the second proviso to section 43B by the Finance Act, 2003 is retrospective. The Hon’ble Delhi High Court in the case of CIT v. Aimil Limited [(2010) 321 ITR 508 (Delhi)] has allowed deduction in respect of employees’ share when the amount was paid before the due date. When we consider these two judgments, it becomes patent that both the employer’s and employees’ contribution are allowable as deduction if the amount of provident fund etc., though belatedly, but is paid before the due date of filing of return u/s 139(1) of the Act.

Adverting to the facts of the instant case, it is seen as an admitted position that the assessee deposited the employees’ contribution towards EPF and ESIC before the due date u/s 139(1) of the Act. Respectfully following the aforenoted judgment of the Hon’ble jurisdictional High Court, I order for the deletion of the addition.