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

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ITA 5783/DEL/2017Status: DisposedITAT Delhi21 December 2017AY 2014-153 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 the employee's share of Provident Fund and ESI contributions are allowable as a deduction if paid before the due date of filing the return of income under Section 139(1). This is based on Supreme Court and Delhi High Court judgments.

What were the facts?

The assessee deposited the employee's share of Provident Fund and ESI contributions after the due dates under the respective Acts but before the due date for filing the return of income. The CIT(A) confirmed the disallowance of these amounts.

What were the issues?

Whether employee's share of PF and ESI contributions paid after the statutory due date but before the return filing due date are allowable as a deduction.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 43B

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCHES : SMC : NEW DELHI

Before: SHRI R.S. SYAL

For Appellant: Shri Baldev Raj, CA, Shri Amit Jain, Sr. DR
Hearing: 20.12.2017Pronounced: 21.12.2017

This appeal by the assessee arises out of the order passed by the CIT(A) on 21.06.2017 in relation to the assessment year 2014-15.

2.

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.

3.

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.

4.

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.

5.

In the result, the appeal is allowed.

Order Pronounced in the open Court on 21.12.2017.

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