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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Sri N.V.Vasudevan, JM & Dr.Arjun Lal Saini, AM]
ORDER Per N.V.Vasudevan, JM This is an appeal filed by the assessee against the order dated 25.04.2014 of CIT(A)-III, Kolkata relating to A.Y.2009-10
Grounds of appeal
raised by the assessee read as follows :-
1. I hat on the facts and circumstances of the case, the Ld. CIT(A) erred in confirming disallowance of Rs.4,27,843/-, being the amount of employees' contribution to PF, made by the AO on the ground that the payment was made after the due date of deposit. The payment was made to the PF before the due date of filing of return of income under sec 139(1) and hence same was allowable business expenditure. The addition, therefore, needs to be deleted.
2. That the assessee craves leave to add, alter, amend or withdraw any ground or grounds of appeal before or at the time of hearing.”
The Assessee as an employer withheld the provident fund contribution payable by its employees from their salaries payable, as their share of contribution to PF. As per section 36(1)(va) of the Act, the sum so withheld as employees contribution to PF, 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 ITA No.1448/Kol/2014-M/s. Jagdamba Industries Ltd. A.Y.2009-10 2 the employees’ contribution to PF 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 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) confirmed the order of the AO. Hence the present appeal by the Assessee before the Tribunal.
We have heard the submissions of the learned counsel for the Assessee. The Hon’ble Delhi High Court in the case of CIT vs AIMIL Ltd. & Ors. 229 CTR 418 (Del) has 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. 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. Jagdamba Industries Ltd. A.Y.2009-10 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 are of the view that the claim for deduction as made by the Assessee has to be allowed. We therefore allow the appeal of the Assessee.
In the result, appeal by the Assessee is allowed. Order pronounced in the open Court on 08.03.2017.