The Tax Publishers2022 TaxPub(DT) 7143 (Bang-Trib) INCOME TAX ACT, 1961
Sections 36(1)(va) & 43B
Employees' contributions to PF and ESI should be remitted before due date as per Explanation to section 36(1)(va) i.e. on or before the due date under relevant employee welfare legislation like PF Act, ESI Act etc., for the same to be otherwise allowable under section 43B.
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Business deduction under section 36(1)(va) - Employees' contributions to PF and ESI - Amount paid beyond due dates under relevant Acts -
AO, vide an intimation under section 143(1), disallowed a sum under section 43B towards delayed remittance of contributions to PF and ESI. On appeal, CIT (A) gave partial relief to assessee towards employer's contributions and confirmed the disallowance towards employees' contributions. Assessee submitted that the employees' contributions to PF and ESI, though paid belatedly, but were paid before the due date of fling of return of income under section 139(1) and otherwise allowable under section 43B. Held: In view of the decision of Supreme Court in the case of Checkmate Services (P.) Ltd. v. CIT-1 (2022) 143 taxmann.com 178 (SC) : 2022 TaxPub(DT) 6647 (SC), employees' contributions to PF and ESI should be remitted before due date as per Explanation to section 36(1)(va) i.e. on or before the due date under relevant employee welfare legislation like PF Act, ESI Act, etc., for the same to be otherwise allowable under section 43B. Hence, disallowance made towards the employees' contributions of PF and ESI was accordingly, upheld.
Followed:Checkmate Services (P.) Ltd. v. CIT-1 (2022) 143 taxmann.com 178 (SC) : 2022 TaxPub(DT) 6647 (SC)
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2018-19
IN THE ITAT, BANGALORE BENCH
BEENA PILLAI, J.M. & PADMAVATHY S, A.M.
Ramakrishnappa Nagaraj v. Dy. CIT
ITA No. 795/Bang/2022
21 October, 2022
Appellant by : Sheetal Borkar, Advocate
Respondent by : K.R. Narayana, Addl. CIT-DR (ITAT), Bengaluru
Padmavathy S., A.M.
This appeal by the assessee is against the order of the Commissioner (Appeals), National Faceless Assessment Centre, Delhi (NFAC) dt. 27-9-2022 for the assessment year 2018-19.
2. The only issue in this appeal is regarding disallowance of delayed payment of employee contribution to Employees State Insurance and Provident Fund of Rs.75,57,462 under section 43B read with section 36(1)(va) of the Act by the revenue authorities.
3. The assessee is an individual and filed return of under the head income from business or profession declaring income of Rs.21,74,290 and claiming a refund of Rs.3,86,670. The assessing officer vide intimation under section 143(1) disallowed a sum of Rs.75,57,462 under section 43B of the Income Tax Act, 1961 (the Act) towards delayed remittance contribution to PF and ESI. Before the Commissioner (Appeals), the assessee furnished the break-up of the contribution between employees and employers as under:
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