Whether employees' contribution to PF etc is allowable if deposited before due date of filing ROI u/s S. 2(24)(x) r.w.s 36(1)(va) & 43B?

Last updated: 10 November 2014

Court :
Bombay High Court

Brief :
While completing the assessment u/s 143(3) r/w. Section 147 of the I.T. Act, additions were made on account of payment of employees contribution towards provident fund, ESI and pension fund in a sum of `32,03,947/-.While disallowing the claim for deduction, the department contended that payment of employees' contribution had to be made within the due date viz. on or before the 15th of every succeeding month. Admittedly, these payments were not so made but were paid after the due dates. The AO, therefore, disallowed the deduction made. CIT(A) dismissed the issue of disallowance on account of payment of employees' contribution which was covered under section 36(1)(va) of the I.T. Act and held that the amendments to section 43B, on the basis of which relief could have been given to the assessee, were not retrospective. The Tribunal held that disallowance of the employees contribution made on account of provident fund, ESI and pension fund for assessment year 2003-04 was on account of delay in payment of the employees contribution was not sustainable. Bombay High Court held that employees' contribution to PF etc is allowable if deposited before due date of filing ROI u/s S. 2(24)(x) r.w.s 36(1)(va) & 43B.

Citation :
CIT – Appellant – Versus - GhatgePatil Transports Ltd. – Respondent