Case Law Details
Indian Geotechnical Services Vs ACIT (ITAT Delhi)
Conclusion: Deduction on payment of employees contribution towards PF/ESI made before the due date of filing Income Tax Return under section 139(1) was allowable as the amended provisions of section 43B as well as 36(1)(va) were not applicable for the assessment year under consideration.
Held: Assessee raised the issue regarding the disallowance made by AO in respect of delay for depositing the employees contribution to ESI and PF. Assessee had deposited the employees contribution to ESI and PF belatedly but before due date of filing the return of income u/s. 139(1). AO relied upon the CBDT Circular No.22/2015 as well as Section 36(1)(va) read with Section 2(24)(x) and held that the contribution to PF and ESI was upto the due date provided in the respective statement was allowable deduction and not upto due date of filing of return. AO accordingly disallowed the sum of Rs.1,70,120/-. It was held that there were series of decisions of various High Courts wherein it was held that the payment of employees contribution if made before due date of filing of return of income u/s.139(1), the same was allowable deduction against the corresponding income of the said amount treated as per the provision of Section 2(24)(x). By the Finance Act, 2021, the provision of Section 36(1)(va) as well as Section 43B had been amended to this extent by inserting the Explanation-2 whereby it was clarified that the provision of Section 43B should not apply and should be deemed never to have been applied for the purpose of determining the due date under this clause. Therefore, the amended provisions of Section 43B as well as 36(1)(va) were not applicable for the assessment year under consideration. By following the binding decision of Hon’ble Jurisdictional High Court, the employees contribution paid by assessee before the due date of filing of return of income u/s.139(1) was an allowable deduction.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is directed against the order dated 28.11.2017 of Commissioner of Income Tax (Appeals)- XX, New Delhi for the Assessment Year 2014-15. The Revenue has raised the following grounds of appeal as under:
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