PCIT Vs Rajasthan Rajya Vidyut Utpadan Nigam Ltd (Rajasthan High Court)
Rajasthan High Court held that share of the employee in the provident fund deducted by the employer, has to be deposited as per the due date fixed by the EPF Act and ESI Act concerned and not as per Section 43B of the Income Tax Act.
Facts- The respondent-company is engaged in distribution of electricity. The return for assessment year 200910 was filed and the assessment was finalized under Section 143(3) of the Act. The two issues arose in the assessment proceedings. Firstly, can deduction be allowed if employees’ share of provident fund is deposited beyond the date stipulated in the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 and Employees’ State Insurance Act, 1948. Secondly, the effect of late deposit of TDS on claiming deduction of the expenditure.
Conclusion- Held that share of the employee in the provident fund deducted by the employer, has to be deposited as per the due date fixed by the EPF Act and ESI Act concerned and not as per Section 43B of the Act. There is no leeway with the assessee in depositing of amount of employees contribution under EPF Act and ESI Act, beyond the due date as prescribed by the respective Act. It is only on the deposit in compliance with the provisions of the EPF Act and ESI Act, the retained amount is treated for deduction.
