The AO has made additions for employees’ contribution to PF & ESI deposited after the due date as per the relevant statutes but before filing of return of income under section 139(1) of the Act.

The Tribunal referred to the Madras High Court decision in the case of CIT v. M/s Industrial Security & Intelligence India Pvt. Ltd. (TCA No. 585 and 586 of 2015) dated 24.07.2015 wherein the Division Bench dismissed the department appeal and upheld the Tribunal order which had held that Employees contribution to PF and ESI paid before filing of return of income under section 139(1) of the Act is not be disallowed under section 43B.  Further the Tribunal also noted a contrary judgement of the Madras High Court decision in the case of Unifac Management Services (India) Private Limited v. DCIT (WMP 6461 of 2018) which was given by a single judge of the Madras High Court and noted that various High Courts in India have taken a different view on this Issue.

The Tribunal further referred to the Chennai Tribunal decision in the case of ACIT v. Carat Lane Trading Pvt. Ltd. [2018] 89 taxmann.com 434 (Chennai)(Trib.) wherein it was held that contribution of employee contribution to PF and ESI by due date of filing return of income u/s. 139(1) will not be hit by provisions of section 36(1)(va) read with section 43B of the Act. 

Accordingly, following the decision of Division Bench of Madras High Court in the case of CIT v. M/s Industrial Security & Intelligence India Pvt. Ltd. (supra) and co-ordinate bench decision in the case of ACIT v Carat Lane Trading Pvt. Ltd. (supra), the Tribunal has deleted the addition made under section 36(1)(va) read with section 43B of the Act. (AY. 2013-14)