High Volt Electricals (P.) Ltd. Vs ACIT (ITAT Mumbai)
Since both the employee’s and employer’s contribution to Provident Fund was covered under the amended provision of section 43B, therefore Employees contribution to Provident fund (EPF), beyond the due date stipulated under the Provident Fund Act but before the due date of filing return of income under section 139(1) could not be disallowed by invoking section 43B of Income Tax Act, 1961.
FULL TEXT OF THE ITAT JUDGMENT
The present appeal filed by the assessee for A.Y. 2013-14 is directed against the order passed by the Commissioner of Income Tax (Appeals)-3, Thane, dated 25.04.2017, which in turn arises from the order passed by the A.O under Sec. 143(3) of the Income-tax act, 1961 (for short ‘Act’), dated 29.02.2016. The assessee assailing the order of the CIT(A) has raised before us the following grounds of appeal:-
“1. Employees Contribution to Provident Fund of Rs. 6,30,867/-
a) On the facts and in the circumstances of the case and in law, the Hon’ble CIT(A) has erred in confirming addition of Rs. 6,30,867/- payment made towards Employee Contribution to Provident Fund after specific due date.”
2. Briefly stated, the assessee company which is engaged in the business of manufacturing and repair of electrical transformers had filed its return of income for A.Y. 2013-14 on 27.08.2013, declaring total income at Rs. 2,23,68,227/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2).
3. During the course of assessment proceedings, it was observed by the A.O, that the assessee had deposited an amount aggregating to Rs. 6,30,867/- towards Employees Contribution to Provident fund, beyond the stipulated date contemplated under the Provident Fund Act. The assessee relying on the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC), submitted before the A.O, that as the respective payments were made before the ‘due date’ applicable in its case for furnishing the ‘return of income’ under Sub-section (1) of Sec. 139 for the year under consideration in which the liability to pay such sum was incurred, thus, as per the post amended Sec. 43B of the Act, no disallowance of the aforesaid amount was called for in its hands. However, the A.O was not persuaded to subscribe to the aforesaid claim of the assessee. The A.O held a conviction that as the judgment of the Hon’ble Apex court in the case of Alom Extrusions Ltd. (supra) was rendered in context of Sec. 43B of the Act, thus the same would have no bearing as regards the disallowance of the aforesaid amount under Sec. 36(1)(va) r.w. Sec. 2(24)(x) of the Act. In order to fortify his aforesaid view, the A.O relied on the CBDT Circular No. 22/2015, dated 17.12.2015. On the basis of his aforesaid deliberations, the A.O inter alia disallowed the amount of Rs. 6,30,867/- under Sec. 36(1)(va) r.w.s. 2(24)(x) of the Act.
4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee before him, was however, not persuaded to accept the same and sustained the aforesaid disallowance.
5. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The Ld. Authorized Representative (for short ‘A.R’) for the assessee Shri. Virag Shah submitted, that as the assessee had deposited the amount of the employees contribution towards provident fund, before the ‘due date’ contemplated under Sec. 139(1) for filing of its return of income for the year under consideration viz. A.Y 2013-14, thus, no disallowance was called for in its hands. The Ld. A.R in order to buttress his claim that the aforesaid payments were made before the ‘due date’ of filing of the ‘return of income’ for the year under consideration, viz. A.Y. 2013-14, furnished a chart which reads as under :-
