DCIT, CHENNAI vs. R P TELEBUY SKYSHOP PVT. LTD., CHENNAI

Both the appeals of the Revenue are directed against the common order passed by the Commissioner of Income Tax (Appeals) -3, Chennai, dated 28.10.2016 and pertain to assessment years 2012-13 and 2013-14. Therefore, we heard both the appeals together and disposing of the same by this common order.

Shri Shiva Srinivas, the Ld. Departmental Representative, submitted that the only issue arises for consideration is disallowance of employees’ contribution for both the assessment years. The Assessing Officer disallowed a sum of `28,79,604/- for assessment year 2012-13 and a sum of ` 43,29,942/- for assessment year 2013-14, being the employees’ contribution which were not deposited in Government account within the time limit provided under the Provident Fund Act. According to the Ld. D.R., under Section 36(1)(va) of the Income-tax Act, 1961 (in short 'the Act'), the employees’ contribution made to Provident Fund and ESI is allowable if the same is credited to the Government account within the due date provided under the respective Act. Therefore, according to the Ld. D.R., the CIT(Appeals) is not justified in allowing the claim of the assessee.

On the contrary, Sh. B. Ramakrishnan, the Ld. representative for the assessee, submitted that the employees’ contribution even though was not deposited within the due date provided under the respective Act, it was admittedly deposited within the due date provided for filing of return of income under Section 139(1) of the Act. Therefore, according to the Ld. representative, the CIT(Appeals) rightly following the order of this Tribunal in Express Publication (Madurai) Ltd., has allowed the claim of the assessee. Referring to another order of this Tribunal in ACIT v. Easun Products of India (P) Ltd. in dated 19.05.2016, the Ld. representative submitted that this Tribunal by placing reliance on the judgment of Madras High Court in Industrial Security & Intelligence India Pvt. Ltd. in Tax Case (Appeal) Nos.585 and 586 of 2015, allowed the employees’ contribution which was deposited within the due date provided for filing of return of income under Section 139(1) of the Act. Therefore, according to the Ld. representative, the CIT(Appeals) has rightly allowed the claim of the assessee.

We have considered the rival submissions on either side and perused the relevant material available on record. It is not in dispute that the employees’ contribution was deposited within the due date provided for filing return of income under Section 139(1) of the Act. The contention of the Revenue appears to be that the employees’ contribution has to be deposited within the due date provided under Provident Fund Act. The Madras High Court in Industrial Security & Intelligence India Pvt. Ltd. (supra) examined this issue and after referring to the judgment of Apex Court in CIT v. Alom Extrusions Ltd. (319 ITR 306) and Delhi High Court in CIT v. Amil Ltd. (321 ITR 508), found that deposit of employees’ contribution after the due date prescribed under relevant Act but before the date of filing of return of income under the Income-tax Act, cannot be disallowed. In view of the judgment of Madras High Court in Industrial Security & Intelligence India Pvt. Ltd. (supra), this Tribunal is of the considered opinion that the CIT(Appeals) has rightly allowed the claim of the assessee. Therefore, the same is confirmed.

In the result, both the appeals filed by the Revenue are dismissed.