Deduction allowed if assessee remits the employee’s contribution to Provident Fund/ESI within the due date mentioned

Last updated: 24 February 2021

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Quick Summary

This Income Tax Appellate Tribunal case concerns whether an assessee can claim deductions for employee contributions to Provident Fund (PF) and ESI. The tribunal considered the disallowance of Rs. 10,27,979/- and Rs. 2,24,261/- made by the Assessing Officer. The key issue was whether these amounts, deducted from employee salaries, were remitted to the government treasury within the stipulated due dates as required by law.

Court :
ITAT Hyderabad

Brief :
This appeal is filed by the assessee against the order of the Ld. CIT (A)-1, Hyderabad in appeal No.0174/CIT(A)-1, Hyd/2017-18/2018-19, dated 03/10/2018 passed U/s. 143(3) r.w.s 250(6) of the Act for the AY 2015-16.

Citation :
ITA 237/Hyd/2019

IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH “B”, HYDERABAD

BEFORE SHRI A. MOHAN ALANKAMONY,
ACCOUNTANT MEMBER
AND
SHRI S.S. GODARA, JUDICIAL MEMBER

ITA No.237/Hyd/2019
(AY: 2015-16)

Café D Lake Private Limited,
Hyderabad.
PAN: AACCC 2044 F
(Appellant)

Vs.

Income Tax Officer,
Ward-1(4),
Hyderabad.
(Respondent)

Assessee by:Shri P. Murali Mohana Rao
Revenue by:Shri Rohit Mujumdar, DR

Date of hearing:12/01/2021
Date of pronouncement:03/02/2021

ORDER

PER A. MOHAN ALANKAMONY, AM:

This appeal is filed by the assessee against the order of the Ld. CIT (A)-1, Hyderabad in appeal No.0174/CIT(A)-1, Hyd/2017-18/2018-19, dated 03/10/2018 passed U/s. 143(3) r.w.s 250(6) of the Act for the AY 2015-16.

2. The assessee has raised several grounds in its appeal; however the cruxes of the issues are that:-

1. The Ld.CIT(A) has erred in upholding the order of Ld.AO, who had made addition of Rs.10,27,979/- and Rs. 2,24,261/- U/s. 36(i)(va) of the Act, being the employee’s contribution to provident fund and ESI respectively which was deducted from the employee’s salary and not remitted into the Government treasury within the period stipulated under the relevant Act.

To know more in details find the attachment file

FAQ :

The main issue is whether the assessee can claim deductions for employee contributions to Provident Fund (PF) and ESI, which were deducted from salaries but allegedly not remitted within the due dates.

The Assessing Officer disallowed Rs. 10,27,979/- for employee PF contributions and Rs. 2,24,261/- for employee ESI contributions.

The additions were made under Section 36(i)(va) of the Income Tax Act.

The deduction is allowed if the employee's contribution to Provident Fund/ESI is remitted within the due date mentioned in the relevant Act.