Sarvesh Kumar Singh (Student CA Final (Articled Asst.)) (170 Points)
09 July 2011Case : A charitable organisation is running a school. ESI authotities have imposed a penalty or Rs. 28000/- for non deduction and deposit of ESI on school and the school dep[osited the amount.
My Q. is whether the penalty deposited by school should be treated as application of income or not. because the payment of income tax is treated as application of income which is disallowed in PGBP.
kanagaraj
(CHARTERED ACCOUNTANT)
(793 Points)
Replied 11 July 2011
Dear Sarvesh, I don't think the ESI act is applicable to schools running by charitable trsut. Because the Act particularly mention that any factory or establishments are coming under the purview of the Act. Since the school does'nt satisfy both, the applicablity is a question mark.However any penalty cannot be taken as application of income.
Sarvesh Kumar Singh
(Student CA Final (Articled Asst.))
(170 Points)
Replied 11 July 2011
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 11 July 2011
transfer the amount to workmen welfare account as the amount has been paid for employees only, through there is no direct benefit to employees with the funds remitted,
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