The Assessing Officer 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.
On first appeal, the Commissioner (Appeals) held that since the money had already been paid by the assessee employer and was no longer in the hands of assessee it could not be taken as income.
On appeal by revenue, the Tribunal confirmed the decision of Commissioner (Appeals). On further appeal by the revenue, high Court held that 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) makes it a deduction in the event the contribution thus received is deposited on or before the due date.
The due date referred to in section 36 (1)(va) must 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 sect ion 43B(b) i .e. , payment / contribution made to the Provident Fund Authority any time before filing the return for the year in which the liability to pay accrued along with evidence to establish payment thereof.
The Assessing Officer proceeded on the basis that 'due date', as mentioned in section 36(1)(va) is the due date fixed by the Provident Fund Authority, whereas in the matter of culling out the meaning of the word 'due
date', as mentioned in the said section, the Assessing Officer was required to take note of section 43B(b) and by not taking note of the provisions contained therein committed gross error, which having been rectified by the Appellate
Authority and confirmed by the Tribunal, there is no scope of interference.
CIT Vs. Kichha Sugar Co. Ltd. [(2013) 35 taxmann.com 54 (Uttarakhand), Uttarakhand High Court, dtd. 20.05.2013, in favour of assessee]