Case Law Details
Nakoda Ispat Ltd. Vs DCIT (ITAT Raipur)
Admittedly and undisputedly, the employees’s contribution to ESI and PF which have been collected by the assessee from its employees have thus been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Till this provision is enacted in as the due amounts on one pretext or the other were not being deposited by the assessees though substantial benefits had been obtained by them in the shape of the amount having been claimed as a deduction but the said amounts were not deposited. It is pertinent to note that the respective Act such as PF / ESIC etc. also provides that the amounts can be paid later on subject to payment of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. Thus, we are of the view that where the PF and/or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under Section 36(1)(va) of the IT Act. This view is rendered in CIT vs. Jaipur Vidyut Vitran Nigam Ltd., CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd., and CIT vs Rajasthan State Beverages Corportation Limited. In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act.
We further note that though the ld. CIT(A) has not disputed the facts of the case that the amount has been deposited by the assessee before the due date of filling return of income but has followed the decision of Hon’ble Gujarat HC in the case of CIT-II Vs. Gujarat State Road Transport where in the HC held that amendment in section 43B vide Finance Act 2003 will apply only for employer’s contribution. So far as employee’s contribution is concerned it is not governed by section 43B but by section 2(24)(x) and 36(1)(va).
Based on the above discussion and findings that the amendment is prospective and not retrospective and when there are two views on the issue one which is favourable to the assessee holds better footing. Therefore, based on the above findings we allow the claim of the assessee for Rs. 18,12,622/- being the employees contribution towards EPF/ESIC and direct the AO to deleted the said disallowance.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
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