Considering section 36(1)(va) of the Income Tax Act, 1961 read with sub-clause (x) of clause 24 of section 2, it is held that with respect to the sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section (2) applies, the assessee shall be entitled to deduction in computing the income referred to in section 28 with respect to such sum credited by the assessee to the employees’ account in the relevant fund or funds on or before the “due date” mentioned in explanation to section 36(1)(va). Consequently, it is held that the learned tribunal has erred in deleting respective dis allowances being employees’ contribution to PF Account / ESI Account made by the AO as, as such, such sums were not credited by the respective assessee to the employees’ accounts in the relevant fund or funds (in the present case Provident Fund and/or ESI Fund on or before the due date as per the explanation to section 36(1)(va) of the Act i.e. date by which the concerned assessee was required as an employer to credit employees’ contribution to the employees’ account in the Provident Fund under the Provident Fund Act and/or in the ESI Fund under the ESI Act.
ITAT benches in the following cases held the view that employees contribution is controlled by section 36(1)(va) and not by section 43B :-
- Jt. CIT v. ITC Ltd.(2008) 299 ITR (AT) 341 (Kol-Trib)
- Dy. Commissioner of Income Tax v. Bengal Chemicals & Pharmaceuticals Ltd. (2011) 41 (II) ITCL 345 (Kol C-Trib)
- ICI India Ltd. v. Addl. CIT (2012) 43 (II) ITCL 339 (Kol B-Trib)
- Dy. CIT v. Ashika Stock Broking Ltd. (2011) 44 SOT 556 (Kol-Trib) : (2011) 139 TTJ (Kol-Trib) 192
- South Eastern Coalfields Ltd. v. Joint CIT (2003) 85 ITD 608 (Nag-Trib)
- ITO v. LKP Securities Ltd. ITA No. 638/2012, dt. 17-5-2013 (Mum-Trib)
- High Courts however has taken the opposite view
- CIT v. Sabari Enterprises (2008) 298 ITR 141 (Karn)
- Spectrum Consultants India (P) Ltd. v. Commissioner of Income Tax (2013) 215 Taxman 597 (Karn)
- CIT v. Kichha Sugar Company Ltd. (2013) 356 ITR 351 (Uttarakhand–HC)
- CIT v. AIMIL Ltd.(2010) 321 ITR 508 (Del)
- CIT v. Nipso Polyfabriks Ltd. (2013) 350 ITR 327 (HP)
- CIT v. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (2013) 53 (I) ITCL 433 (Raj-HC)
HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 637 of 2013, TAX APPEAL NO. 1711 of 2009, TAX APPEAL NO. 2577 of 2009, TAX APPEAL NO. 925 of 2010, TAX APPEAL NO. 949 of 2010, TAX APPEAL NO. 965 of 2010, TAX APPEAL NO. 1655 of 2010, TAX APPEAL NO. 2365 of 2010, TAX APPEAL NO. 2378 of 2010, TAX APPEAL NO. 2644 of 2010, TAX APPEAL NO. 814 of 2011
COMMISSIONER OF INCOME TAX II
Versus
GUJARAT STATE ROAD TRANSPORT CORPORATION
Date of Pronouncement: 26/12/2013
