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Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
PER PRASHANT MAHARISHI, A. M. 1. This appeal is filed by the assessee for Assessment Year 2014-15 against the order of the ld CIT(A)-28, New Delhi dated 29.06.2017, wherein, the amount of employees contribution was disallowed by the ld AO of Rs. 4,03,239/- applying the provisions of section 36(i)(va) and section 43B of the Act. 2. The facts of the case shows that the assessee is a company it filed its original return of income on 29.11.2014 declaring income of Rs. 1,02,29,580/-. The assessee’s case was selected for scrutiny. During the course of assessment proceedings on perusal of the tax audit report it was found that the assessee did not comply with the provisions of section 36(i)(va) and section 2(24)(X) of the Act on account of payment to be made of employees contribution towards provident fund in state insurance claim It was noted that the assessee has not deposited the sum of Rs. 388464/- of Provident Fund and Rs. 14775/- on account of employees State insurance within due date prescribed under the Provident Fund Laws. According to the ld AO same is required to be deposited within due date prescribed under Page | 1 the respective laws. The contention of the assessee is that the above sum has been paid before the due date of the filing of the return of income therefore, same is required to be allowed as deduction in the year in which the payment is made or if paid before the due date of filing of the return in the assessment year two it belongs to. The assessee contested that in view of the decision of the CIT Vs. Vinay Cements 213 CTR 268 and CIT Vs. Alom Extrusions 319 ITR 306. Thus the contention of the assessee the about disallowance cannot be made. The ld AO rejected the contention of the assessee and stated that due date means the date for deposit of the above contribution is the dates mentioned in the respective PF and State Insurance Act. Undisputedly, the assessee did not deposit the amount before the dates prescribed by the respective Provident Fund Act. The ld AO disallowed the sum amounting to Rs. 403239/- and passed an assessment order u/s 143(3) of the Act on 30.11.2016 determining the total income of the assessee at Rs. 10632820/-.
The assessee preferred appeal before the ld CIT(A) who dismissed the same relying on the decision of the Hon’ble Gujarat High Court in case of Gujarat State Road Transport Corporation and of Hon’ble Kerala High Court CIT Vs. Merchem Ltd 378 ITR 443. Therefore, the assessee is in appeal before us.
Despite notice to the assessee none appeared. Therefore, the issue is decided on the merits of the case as per information available on record.
The ld DR vehemently supported the order of the ld AO and ld CIT(A).
We have carefully considered the rival contentions and perused the order of the lower authorities. Brief contention in this case is that whether the amount of employee’s contribution deposited beyond the due date prescribed in the respective provident fund laws is allowable to the assessee as a reduction or not. The Hon’ble Delhi High Court in case of CIT Vs. Amil Ltd 2010-TIOL-125-HC-DEL-IT wherein, it has been held that the payment of even employees contribution before the due date of filing of return of income is allowable as deduction to the assessee despite all the facts that such contribution has not been deposited within the due date prescribed under the respective Provident Fund Laws. In view of this, we find that disallowance made by the lower authorities is not sustainable in law.