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Income Tax Appellate Tribunal, BENCH ‘C’ KOLKATA
Before: Hon’ble Shri N.V.Vasudevan, JM & Shri M.Balaganesh, AM ]
ORDER
PER N.V.VASUDEVAN, JM:
This is an appeal by the Revenue is directed against the order dated 05.02.2014 of CIT(A)-I, Kolkata relating to A.Y.2004-05.
2. Grounds of appeal
raised by the revenue read as follows :-
1. That on the facts and in circumstances of the case the CIT(A) has erred in deleting the addition made by the A.O. on account of delayed payment of employees contribution towards P.F. & E.S.I. for Rs.99,29,494.
The appellant crave leave to amend, modify and alter ground of appeal during the course of hearing of this case.”
The Assessee is a company engaged in the business of manufacturs and sale of jute goods. The Assessee as an employer withheld the provident fund contribution payable by its employees from their salaries payable, as their share of contribution to Provident Fund (PF) and Employees State Insurance (ESI). As per section 36(1)(va) of the Act, the sum so withheld as employees contribution to PF & ESI, if it is not paid on or before the due date as provided under the relevant law governing the provident fund, will not be allowed as deduction. It is the plea of the assessee that the employees’ contribution to PF & ESI had been paid by the assessee on or before the due date of filing the return of income for the relevant assessment year u/s 139(1) of M/s. North Brook Jute Co.Ltd. A.Y.2004-05 2 the Act and therefore deduction claimed should be allowed as provided under the proviso to section 43B of the Act. The said plea of the assessee was rejected by the AO for the reason that the proviso to section 43B of the Act cannot be read into the provision of section 36(1)(va) of the Act.
On appeal by the assessee, the CIT(A) directed the AO to allow the claim of the assessee for deduction and in doing so, the CIT(A) followed the decision of the Hon’ble Delhi High Court in the case of CIT vs AIMIL Ltd. & Ors. 229 CTR 418 (Del) wherein it was held that employees’ contribution to PF should be allowed as deduction which is paid on or before the due date of filing the return of income u/s 139 of the Act. Aggrieved by the order of CIT(A) the revenue has raised ground no.2 before the Tribunal.
None appeared on behalf of the assessee. At the time of hearing it was brought to our notice that the Hon’ble Calcutta High Court has also taken the view that employees’ contribution to PF paid on or before the due date of filing the return of income u/s 139(1) of the Act should be allowed as deduction. In this regard the decision of the Hon’ble Calcutta High Court in the case of M/s. Akzo Nobel India Ltd. Vs CIT in ITA 110 of 2011 order dated 14.06.2016 and in the case of CIT vs Vijayshree Ltd., of the Hon’ble Calcutta High Court in GA No.2607 of 2011 order dated 06.09.2011 was filed before us. In the order in the case of Vijayshree Ltd., (supra), the Hon’ble Calcutta High Court held as follows : “The only issue involved in this appeal is as to whether the deletion of the addition by the Assessing Officer on account of Employees’Contribution to ESI and PF by invoking the provision of Section 36(1)(va) read with Section 2(24)(x) of the Act was correct or not. It appears that the Tribunal below, in View of the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., reported in 2009 Vol.390 ITR 306, held that the deletion was justified.
Being dissatisfied, the Revenue has come up with the present appeal.
After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the M/s. North Brook Jute Co.Ltd. A.Y.2004-05 3
Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec. 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nat.ure and is required to be applied retrospectively with effect from 1 st April, 1988.
Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act.
We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal.”
In view of the aforesaid decision of the Hon’ble Calcutta High Court, we do not find any merits in the ground raised by the revenue and accordingly the same is dismissed.
In the result the appeal of the revenue is dismissed.