Case Law Details
Jayajothi & Co. Pvt Ltd Vs ITO (ITAT Chennai)
ITAT Chennai held that one delay in deposit of employees contribution to PF & ESI covered by the provisions of the General Clauses Act, 1897 as due date was a national holiday. Disallowance u/s u/s.36(1)(va) of the Income Tax Act, 1961 for such delay unjustified.
Facts- The assessee is a Limited Co., filed its return of income for AY 2018-19. The return was subsequently processed by CPC proposing disallowance of employees contribution to PF & ESI paid beyond the due date as per respective acts (but before the due date of filing of the return of income) u/s.36(1)(va) of the Income Tax Act, 1961. The assessee disagreeing with the proposed adjustment has responded to the communication of the CPC stating that several High Courts has taken the view that even the employees contribution paid before due date of filing of the return of income is also an allowable deduction.
The CPC finds no favour in the arguments of the assessee and have proceeded to complete the assessment u/s.143(1) r.w.s.144 of the Act, with the proposed disallowance. CIT(A) also has dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that since the due date of the payment under the provisions of payment of PF Act was 15.08.2017, being a national holiday, it is obvious that the office of the assessee as well as the Bank would be closed on the said date. None of the Office bearers of the assessee who are liable or entrusted with the duty to make the payment of employee’s contribution for PF would be available to perform their duty on account of national holiday. Considering such circumstances, we are of the considered view that the provision of Sec.10 of the General Clauses Act, 1897, u/s.10 of the said Act, are very much applicable in the present case to rescue the contention of the assessee.
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