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

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

Employee's contribution towards
Provident Fund if paid before due date of filing return is allowable under
section 36(1)(va) to employer-assessee

In the instant case the AO had disallowed the payment made by the assessee
to the Provident Fund Authority on account of employee's contribution
towards 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 was
no longer in the hands of assessee it could not be taken as income.
Further, the Tribunal confirmed the decision of CIT (A). Aggrieved revenue
filed 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 is
deposited on or before the due date;

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

3) The AO proceeded on the basis that 'due date', as mentioned in section
36(1)(va) was the due date fixed by the Provident Fund Authority, whereas
he was required to take note of section 43B(b). By not taking note of the
provisions contained therein, he committed gross error, which had been
rectified 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 vinanti2504@gmail.com

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