Due date under sec. 36(1)(va) for payment of employees contribution to PF remains same under sec. 43B

Studycafe | Jan 9, 2016 |

Due date under sec. 36(1)(va) for payment of employees contribution to PF remains same under sec. 43B

Due date under sec. 36(1)(va) for payment of employees contribution to PF remains same under sec. 43B

 

Due date under sec. 36(1)(va) for payment of employees contribution to PF is same as contemplated under section 43B

Employee’s contribution towardsProvident Fund if paid before due date of filing return is allowable undersection 36(1)(va) to employer-assessee. In the instant case the AO had disallowed the payment made by the assesseeto the Provident Fund Authority on account of employee’s contributiontowards Provident Fund since there was delay in payment. On appeal, the CIT(A) held that since the money had already been paid by the assessee and wasno longer in the hands of assessee it could not be taken as income.Further, the Tribunal confirmed the decision of CIT (A). Aggrieved revenuefiled the instant appeal.The HC held in favour of assessee as under:

1) Any sum received by the assessee from his employees towards contributions to the Provident Fund is the income of the assessee, however,section 36(1)(va) allows deduction if contribution thus received isdeposited on or before the due date;

2) The due date referred to in section 36(1)(va) is to be read inconjunction with section 43B(b) and a reading of the same would make itamply clear that the due date as mentioned in section 36(1)(va), is the duedate as mentioned in section 43B(b), i.e., payment or contribution made tothe Provident Fund Authority before the filing the return for the year inwhich the liability to pay has accrued;

3) The AO proceeded on the basis that ‘due date’, as mentioned in section36(1)(va) was the due date fixed by the Provident Fund Authority, whereashe was required to take note of section 43B(b). By not taking note of theprovisions contained therein, he committed gross error, which had beenrectified by the appellate authority and confirmed by the Tribunal. So, there was no scope of interference in the order of the Tribunal CIT V.KICHHA SUGAR CO. LTD [2013] 35 taxmann.com 54 (Uttarakhand)

This case law has been shared by student of ICAI vinanti zatakiya. You can reached her at [email protected]

 

Section 36(1)(va) in The Income- Tax Act, 1995

(va) any sum received by the assessee from any of his employees to which the provisions of sub- clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee’ s account in the relevant fund or funds on or before the due date. Explanation. For the purposes of this clause,” due date” means the date by which the assessee is required as an employer to credit an employee’ s contribution to the employee’ s account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise;]

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