Employee’s contribution to Provident fund & applicability of amended Section 43B on employees contribution

High Volt Electricals (P.) Ltd. v. Asstt. CIT

Decision: In assessee’s favour.

Facts:

Assessee-company was engaged in the business of manufacturing and repair of electrical transformers. Assessee had deposited amount towards Employee’s contribution to Provident fund, beyond the stipulated date contemplated under the Provident Fund Act but before the due date of filing return of income under section 139(1) thus, as per amended section 43B, no disallowance could be made. Revenue submitted that section 43B was not applicable in respect of employee’s contribution and made disallowance under section 36(1)(va), read with section 2(24)(x).

Held:

Following the judgment of High Court in CIT (Central) v. Ghatge Patil Transports Ltd. (2015) 228 Taxman 340 (Bom.): 2014 TaxPub(DT) 4175 (Bom-HC) wherein it was held that both the employees and employers contribution would be covered under the amended section 43B.Therefore, Employee’s contribution to Provident fund, beyond the stipulated date contemplated under the Provident Fund Act but before the due date of filing return of income under section 139(1) could not be disallowed by invoking section 43B.