Late deposit of employee’s contribution to ESI/PF allowed if the deposited before due date of filing return under section 139(1)
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Case Details: |
Suryauday Spinning Mills Pvt. Ltd. vs. DCIT |
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Appeal No.: |
ITA No. 157/Hyd./2021 |
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Order pronounced by: |
ITAT Hyderabad |
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Date of order: |
03-05-2021 |
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In favour of: |
Assessee |
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Assessment Year: |
2018-19 |
Brief Facts:
- The A.O. at CPC, Bengaluru made disallowance of Rs. 9,88,983/- towards delayed payment of ESI and PF. The assessee in appeal before CIT(A) argued that the employee’s contribution to ESI and PF was deposited beyond the due date in the statue but well before filing of return of income.
- The assessee relied upon the judgement of Hon’ble Supreme Court in the case of CIT vs. Alom Extrusions Limited (2009) 319 ITR 306 (SC) in support of its claim of deduction.
- The CIT(A) also confirmed the order of A.O. Therefore, the assessee made an appeal with Tribunal.
Submission by assessee:
- Similar issue has come up before this tribunal in a number of cases where in the coordinate benches of this tribunal have followed the decision of the hon’ble Supreme Court in the case of Alom Extrusions (supra) to allow the deduction in the case of the employee’s contribution to PF and ESI if the same was remitted to relevant account before the due date of filing return of income.
- Further, the department has brought in the amendment to section 43B w.e.f. A.Y. 2021-22 and thereafter, employees’ contribution to PF and ESI will not be allowed if it is not paid before the due date of the relevant Act.
Tribunal verdict:
In view of material placed on record and various decisions of the tribunal which in turn have followed the decision of hon’ble Supreme Court in the case of Alom Extrusions, it is directed to A.O. to allow the deduction in case of employee’s contribution to PF and ESI if it has been paid on or before the date of filing of return of income.
Read complete order: https://www.itat.gov.in/files/uploads/categoryImage/1621404880-ITA%20157.pdf
