Appeal details
Counselvise Citation
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 1 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-11-2024
Appeal Filed By
Department
Order Result
Partly Allowed
Bench Allotted
B
Next Hearing Date
03-09-2024
Assessment Year
2012-2013
Appeal Filed On
27-10-2023
Judgement Text
"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ \nIN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH \n \nHEARING THROUGH: PHYSICAL MODE \n \nŵी िवŢम िसंह यादव, लेखा सद˟ एवं ŵी परेश म. जोशी, Ɋाियक सद˟ \nBEFORE: SHRI. VIKRAM SINGH YADAV, AM & SHRI. PARESH M. JOSHI, JM \n \nआयकर अपील सं./ ITA Nos. 659 & 645/Chd/2023 \nिनधाŊरण वषŊ / Assessment Years : 2012-13 & 2013-14 \n \nThe DCIT \nCircle, Patiala \nबनाम \n \nPunjab State Power Corporation \nLimited, \nThe Mall, Patiala \n˕ायी लेखा सं./PAN NO: AAFCP5120Q \nअपीलाथŎ/Appellant \n \nŮȑथŎ/Respondent \n \nिनधाŊįरती की ओर से/Assessee by : \nShri Rajiv Saldi, C.A \nराजˢ की ओर से/ Revenue by : \nSmt. Kusum Bansal, CIT, DR \n \n \nसुनवाई की तारीख/Date of Hearing : \n03/09/2024 \nउदघोषणा की तारीख/Date of Pronouncement : 28/11/2024 \n \nआदेश/Order \n \nPER VIKRAM SINGH YADAV, A.M. : \n \nThese are two appeals filed by the Revenue against the respective orders \nof Ld. CIT(A)/ NFAC each dt. 23/08/2023 pertaining to Assessment Years 2012-13 \n& 2013-14 respectively. \n2. \nBoth these appeals were heard together and are being disposed off by \nthis consolidated order for the sake of convenience and brevity. \n3. \nWith the consent of both the parties, the case of the Assessee in ITA No. \n659/Chd/2023 was taken as a lead case wherein the grounds of appeal read as \nunder: \n“1. \nWhether on the facts & in the circumstances of the case, the Ld. CIT(A) \nwas right in law in deleting the addition on account of non-payment of \nCPF and GPF amounting to Rs.259,79,18.803/- which is against facts and \nbad in law \n2. \nWhether on the facts & in the circumstances of the case, the Ld. CIT(A) has \nfallen in error by not following the legal maxim that tax statutes are to be \nstrictly construed, as held applicable by the Hon'ble Supreme Court in PCIT \nvs M/s Aarham Softronics Civil Appeal No. 1784 of 2019. \n\n2 \n \n3. \nWhether on the facts & in the circumstances of the case, the Ld. CIT(A) has \nfallen in error by not following the legal maxim that concepts such as \nequity, hardship or compulsion have no place in taxation statutes. \n \n4. \nWhether on the facts & in the circumstances of the case, the Ld. CIT(A) has \nerroneously not followed the binding judgment of Hon'ble Supreme Court \nin the case Checkmate Services Pvt Ltd vs CIT Civil Appeal No. 2833 of \n2016. \n \n5. \nThe appellant craves leave to add, amend or delete any of the grounds of \nappeal during the appellate proceedings.” \n \n4. \nAt the outset, it is noted that this is the second round of appellate \nproceedings wherein the matter travelled up to the Tribunal. It would therefore \nbe necessary to refer to the proceedings during the first round of assessment \nand appellate proceedings and the directions of the Coordinate Bench before \nwe consider and examine the rival submissions advanced by both the parties. \n5. \nDuring the course of original assessment proceedings, the AO referred to \nthe Tax Audit Report (TAR) submitted by the assessee company alongwith its \nreturn of income wherein the Tax Auditor has stated that in respect of \nemployees covered under CPF scheme, Rs. 2,62,83,922/- was deducted during \nthe year which had not been deposited by the assessee company. The Tax \nAuditor further stated that in respect of employees covered under GPF scheme, \nthe assessee company had been deducting Provident Fund (PF) under the \nProvident Fund Rules 1960 framed by the erstwhile PSEB, however the deduction \nhad not been remitted in any separate account and had been utilized for \nassessee’s operation. The AO, referring to the said findings of the Tax Auditor, \nissued a show cause to the assessee company as to why the amount deducted \nunder CPF scheme as well as GPF scheme which are not deposited by the \nassessee company should not be disallowed under the provisions of Section \n36(1)(va) r/w section 43B and of the Act. \n6. \nIn response, the assessee in its submission stated that regarding GPF of Rs. \n253,02,49,471/- which is the net accumulated amount during the year, the \n\n3 \n \nerstwhile PSEB was treating the amount of PF under regulation 41(a) & (b) of the \nProvident Fund Regulations. It was further stated that as per the Regulation \n41(a), GPF balance after deducting final payment, permanent and temporary \nadvance as admissible under these Regulations will be available for use by \nBoard in meeting its capital expenditure under the plan. For this purpose, \nbudgetary provisions shall be made showing gross accretion to the GPF \nbalances, final withdrawals, permanent and temporary advances as admissible \nunder the Regulations. Further referring to the Regulation 14(b) wherein it was \nprovided that capital expenditure made out of the GPF balances will be \nreflected in the creation of the assets of the Board and the provident fund dues \nof the employees shall constitute the first charge on these assets of the Board, it \nwas submitted by the assessee that as per the above Regulation, the amount \nwas to be retained by the PSEB for utilization in capital assets. \n7. \nIt was further submitted that after unbundling of PSEB on 16/04/2010 as per \nClause 10B, 10C and 10D of the notification dt. 24/12/2012 of Government of \nPunjab, the amount of GPF till 31/03/2013 and thereafter will be deposited in \nseparate trust over a period of ten years and the company shall bear the \ninterest from the transition period till the matter is settled through trust i.e; upto \n31/03/2013 . \n8. \nRegarding CPF of Rs. 6,76,69,332/- which was accumulated during the \nyear, it was submitted by the assessee company that the employees recruited \non or after 01/01/2004 are covered under CPF Scheme of the Government of \nIndia and to deposit the same, various formalities i.e. allocation of HOD code \nfrom the State Government, registration of company with the NSDL, allotment of \ncode / account number to the employees etc. took some time. Further \nreference was drawn to Note No. 6 (iii) of the Annual report for the financial \nyear 2011-12 which read as under: \n“Provident Fund & CPF \n\n4 \n \nEmployees on roll up to 31.12.2003 have contributed in G.P.F. an amount of Rs. 2156.92 \ncrore as on 31-3-2012. PSPCL is using these contributions for its own purposes and is \nproviding/ paying interest on this amount. As on date FDRs against GPF is of Rs. 324 crore. \nHowever, a Trust has been created, as notified in Transfer Scheme, and operationalised on \n11-2-11 and 01-04-2013 respectively for maintaining the separate account of provident \nfund of the employees. For employees other than those mentioned above, the PSPCL is \ncontributing equal amount to CPF. Amount worth Rs. 12.36 crore (GH- 57.160 CPF \nemployees contribution Rs. 6.32 crore & GH- 57.165 CPF Boards' contribution Rs. 6.04 crore), \nis not yet deposited. The company has provided interest on the contribution of CPF \n(employees' share and employers' share) @8% since 2007-08 to the tune of Rs. 1.75 crore.” \n \n9. \nIt was submitted before the AO that as per the direction of the \nGovernment, the above amount has been retained under compulsion and not \nby choice and therefore, no disallowance is called for under provision of Section \n43B and 36(1)(va). \n10. \nThe submissions so filed by the assessee company were considered but \nnot found acceptable to the AO. As per the AO, the assessee has clearly \nviolated the provision of Section 43B and 36(1)(va) of the Act. The assessee \ncompany not only delayed in actual payment but completely failed to deposit \nthe amount of CPF and GPF contribution of employees and employer even \nafter the due date of filing of the returned income. The assessee company has \nfailed to deposit total amount of Rs. 259,79,18,803 [ GPF of Rs. 253,02,49,471 + \nCPF of Rs. 6,76,69,332] and the said amount was disallowed and added back to \nthe returned income of the assessee company. \n11. \nThe assessee company thereafter carried the matter in appeal before the \nLd. CIT(A) who has sustained the said findings and the order of the AO. \n12. \nOn further appeal to the Tribunal, the Ld. Counsel for the Assessee \nsubmitted that the A.O. had not considered the facts of the present case in right \nperspective. It was stated that a trust was created in the year under \nconsideration wherein amount deducted was to be deposited. It was further \nstated that the GP Fund after deducting the final payment of the advances was \nto be deposited but in the year under consideration the net accrual was \n\n5 \n \nnegative therefore nothing was to be deposited, but this facts have not been \nappreciated and considered by the A.O. as well as the Ld. CIT(A). It was further \nsubmitted that no such disallowance was made in the previous assessment year \n2011-12 in similar circumstances, therefore the disallowance made by the A.O. \nand sustained by the Ld. CIT(A) was not justified. In his rival submissions, the Ld. \nCIT(DR) submitted that the facts are not clear from the impugned order and it is \nalso not clear what were the conditions in the notification dated 24/12/2012 of \nGovernment of Punjab. He therefore requested that the matter may be restored \nto the A.O. \n13. \nThe Coordinate Bench while disposing off the assessee’s appeal in ITA No. \n744/Chd/2019 for A.Y. 2012-13 vide order dt. 06/12/2019 has held as under: \n“18. \nWe have considered the submissions of both the parties and perused the \nmaterial available on the record. In the present case it is noticed that the Ld. \nCIT(A) had passed a non speaking order in other words he has not brought on \nrecord the relevant facts involved for the year under consideration. It also \nappears that the A.O. had not considered the explanation of the Assessee in right \nperspective particularly it is not brought on record that what were the \ndistinguishable facts from the earlier assessment year, while the Ld. Counsel for \nthe Assessee claimed at Bar that in the similar circumstances no disallowance \nwas made for the A.Y. 2011-12. We, therefore in the absence of clear facts on \nrecord deem it appropriate to set aside this issue back to the file of the A.O. for \nfresh adjudication in accordance with law after providing due and reasonable \nopportunity of being heard to the assessee.” \n \n14. \nIn the set aside proceedings, the AO after issuing the show cause and \ncalling for the submissions from the assessee has sustained the said addition of \nRs. 259,79,18,803/- vide order dt. 18/10/2021. On perusal of the submissions so \nmade by the assessee company before the AO during the set aside \nproceedings, we find that the submission as made in the original proceedings \nwere reiterated before the AO in terms of net accruals to the tune of Rs 107.27 \ncrores and following the PF Regulations of erstwhile PSEB whereby the amount \nwas to be retained for capital purposes and as such no fresh contentions have \nbeen raised/submitted. \n\n6 \n \n15. \nThe submissions so filed by the assessee company were considered but \nnot found acceptable to the AO. As per the AO, the assessee company has \nclearly violated the provisions of Section 43B and 36(1)(va) of the Act. The \nassessee company not only delayed in actual payment but completely failed to \ndeposit the amount of CPF contribution of employees and employer even after \nthe due date of filing of the return of income as mandated in Section 43B of the \nAct. Further, as per the provisions of Section 36(1)(va) of the Act in order to claim \nthe allowance of GPF, the assessee company is required to deposit the amount \nreceived from the employees in the year in the relevant funds or fund on or \nbefore the due date, however, the assessee could not submit any evidence of \nhaving credited this amount to the account of the employees in the relevant \nfund within due date. Since the assessee company has failed to deposit the \namount of Rs. 259,79,18,803/- [ GPF of Rs. 253,02,49,471/- + CPF of Rs. \n6,76,69,332/-], the whole of the amount was disallowed and added back to the \nreturned income. \n16. \nBeing aggrieved, the assessee again carried the matter in appeal before \nthe Ld. CIT(A) and reiterated the submissions so made before the AO. The Ld. \nCIT(A) considering the submissions of the assessee allowed the appeal of the \nassessee company against which the Revenue is now in appeal before us. \n17. \n The findings of the Ld. CIT(A) are contained in para 6.5 to 6.7 of the \nimpugned order and the contents thereof read as under: \n“6.5 \nDuring the appellate proceedings the appellant requested for hearing \nthrough virtual conferencing, during the hearing the AR of the appellant has \nclarified that the issue has arisen out of the restructuring of the company from the \nearlier electricity board. Therefore, the period from April,2010 to 31st March, 2013 \n[FY 2010-11; 2011-12 and 2012-13 relevant to AYs 2011-12; 2012-13 and 2013-14] \nwhen the structures were being unbundled from a Board into 2 separate \ncompanies. During such period, the old system of PF continued till the new norms \nwere notified and consequent approval structure, DDO, approving authorities etc \nwere designated. \n6.6 \nTill such time that the new PF/CPF scheme became operational, the \ncompany continued to deduct and hold net PF collections [gross collections less \n\n7 \n \npayments on a/c of retirements] with it as per the mandate of the GPF \nregulations of the state of Punjab. Copies of such regulations have also been \nprovided and placed on record. The expenditure is thus allowable since it was \nretained by the approved Government of Punjab regulations. \n6.7 \nRegarding the CPF contributions of Rs. 6,76,69,332/- in respect of \nemployees recruited on or after 01/01/2004 covered by the New Pension Scheme \nof Government of India it was submitted that – \nIt is submitted that the amount of Rs 6,76,69.332/- pertains to employees' share In \nthis regard, it is submitted that the employees recruited on or after 01.01.2004 are \ncovered under New Pension Scheme of the Govt, of India. To deposit the same \nwith Govt. various formalities were involved such as allocation of HOD code from \nthe State Govt., registration of the company with NSDL, allotment of \ncode/account no to the employees etc which took its time. The sequence of \nevents that took place to operationalize the deposit of CPF subscription is hereby \nattached as Annexure-D From the facts stated above, it is very much clear that \nthe above amount has been retained under compulsion and not by choice and \nas such shall not be disallowed.” \nThese were also deposited by the company once the notification dated \n24/12/2012 was complied with and the systems for deductions and transmissions \nto PF head were not set up in place, interest for delayed payments was also paid. \nSince, this was a onetime default arising out of restricting and consequent fresh \nsystems being put in place and the company has demonstrated that there was \nno delay attributable to it in the same: the same are allowable tor this period of \nrestructuring since the same were remitted with a delay for reasons beyond the \ncontrol of the appellant.” \n \n18. \nDuring the course of hearing, the Ld. CIT/DR taken us through the \nprovisions of Section 36(1)(iva), Section 36(1)(va) as well as Section 43B of the \nAct and submitted that the Ld. CIT(A) has fallen in error by not following the \nlegal maxim that the tax statute has to be strictly construed as held by the \nHon’ble Supreme Court in case of PCIT Vs. M/s Aarham Softronics Civil Appeal \nNo. 1784 of 2019. It was further submitted that concepts such as equity, hardship \nor compulsion have no placed in tax statutes. It was submitted that in the instant \ncase, the AO has recorded a clear finding that there is complete failure on the \npart of the assessee company in depositing the amount of employee as well as \nemployer share of CPF contribution even after the due date of filing of return of \nincome. It was further submitted that as far as the GPF contribution is \nconcerned, the assessee company could not submit any evidence of having \ncredited this amount to the account of the employees in the relevant fund \n\n8 \n \nwithin the due date. It was further submitted that the Ld. CIT(A) has also failed \nto take into consideration the binding judgment of the Hon’ble Supreme Court \nin case of Checkmate Services Pvt. Ltd. Vs. CIT, Civil Appeal No. 2833 of 2016 \nwhich has been specially rendered in the context of Section 36(1)(va) of the Act \nand the concept of due date has been elaborately discussed therein. It was \naccordingly submitted that the order so passed by the Ld. CIT(A) be set aside \nand that of the AO be sustained. \n19. The Ld. AR in his submission submitted that firstly the figure of disallowance \namounting to Rs. 259.79 Cr has been taken by the AO from Note No. 6 of the \nAnnual Report for the F.Y. 2011-12 relevant to A.Y. 2012-13 and it is the difference \nbetween the opening balance and closing balance of the amount of GPF \nliability. It was submitted that the details of the amount of subscription received \nfrom the employees and payment made on account of GPF during the F.Y \n2011-12 relevant to impugned assessment year are as per the table below: \nTable Showing Subscription and Payments on Account of GPF during A.Y. 2012-13 \n \n \nParticulars \nAmount (Rs.) \nAmount (Rs.) \n \n \n \n \n(A) \nOpening Balance of G.P. Fund (As \nper books of accounts) \n \n18,92,15,72,417 \n \nSubscription received during the year \n5,20,21,62,917 \n \n \nLess:- Payments to employees during the year \n4,22,79,85,058 \n \n(B) \nNet Accrual to GPF during the year \n \n97.41,77,859 \n(C) \nAccrued Interest to the GPF for the year \n \n1,55,26,67,711 \n \nClosing Balance of G.P. Fund (A+B+C) \n \n21,44,84,17,987 \n \n19.1 It was accordingly submitted that the wrong figures have been \nconsidered by the AO without taking into consideration the actual subscription \nreceived during the year and the payment made and the net accrual to GPF \nduring the year is only an amount of Rs. 97,41,77,859/-. \n19.2 It was further submitted that before unbundling of erstwhile PSEB on \n16/04/2010, the PSEB was following Provident Fund Regulation, 1960 in terms of \n\n9 \n \nsection 79(c) of the Electricity (Supply) Act, 1948 for the purposes of establishing \nand maintaining provident fund for the benefit of its employees and the said \nregulations continued to be followed by the assessee company, being one of \nthe companies formed as a result of unbundling of the PSEB for the impugned \nassessment year. It was submitted that the ld CIT(A) has rightly appreciated and \ntaken into consideration the said PF regulations while allowing relief to the \nassessee in so far as disallowance of GPF contribution is concerned. It was \nfurther submitted that as per the said Regulation, separate accounts are \nmaintained for each subscriber/employee which shall show his amount of \nsubscription/contribution for the year alongwith interest calculated as per the \nregulations, withdrawals, etc and the same are duly administered by and \nrecords are duly maintained by the drawing and disbursing officer and in this \nregard, reference was drawn to Regulations 11 and 11-A of the PF Regulations. \nIt was submitted that during the year, there were subscriptions received from the \nemployees to the tune of Rs 5,20,21,62,917/- and there were disbursal to the \ntune of Rs 4,22,79,85,058/- and the said subscriptions and disbursals have been \nduly reflected in the respective subscription account of the employees and \nthere is no dispute in this regard. It was submitted that subscriptions so received \nfrom the employees have in effect being deducted while disbursing the salary \nto the employees and on real time basis, have been credited in respective \nsubscription account of the employees. It was accordingly submitted that there \nis no merit in the contention of the ld DR that the assessee has not credited this \namount to the account of the employees in the relevant fund within the due \ndate. It was further submitted that the GPF balances were to be retained by \nthe PSEB itself and were available for use in meeting the capital expenditure \nunder the plan and reference was drawn to Regulation 41(a) and 41(b) of the \nsaid PF Regulation as per which the amount was to be retained by the PSEB for \nutilization in capital assets. \n\n10 \n \n19.3 It was further submitted that as per the unbundling notification dt. \n16/04/2010, the assessee company was entitled to frame regulations governing \nthe conditions of personnel transferred to the assessee company under the \ntransfer scheme and till such time, the existing service rules / regulations of the \nerstwhile PSEB was applicable and accordingly, during the transitional period of \nunbundling from 16/04/2010 to 31/03/2013, the service rules and regulations of \nerstwhile Board were applicable and as per these regulations, the Provident \nFund was to be retained by the erstwhile Board for capital expenditure and the \nassessee company has duly followed those regulations and as such, the \nemployee share of GPF was duly deposited well within time as required under \nsection 36(1)(va) of the Act and therefore there cannot be any disallowance \nunder the said provision. \n19.4 It was further submitted that during the said period, the assessee \ncompany has made payment to the retired and other employees and only net \nfunds retained by the company was to the tune of Rs. 97,41,77,859/- and in this \nregard, reference was drawn to the notification issued by the Government of \nPunjab dt. 24/12/2012 and the relevant extract thereof read as under: \n\"10-B The General Provident Fund Trust, shall be funded by Powercom and \nTransco both, as per the apportionment made in the Opening Balance Sheet, on \nand with effect from the 16th April, 2010, and the same shall be funded over a \nperiod of ten years commencing on and with effect from the 1st April, 2013, along \nwith interest as applicable: \n \nProvided that for the period commencing from 16th April, 2010 to 31s' \nMarch, 2013, the Powercom and Transco shall be liable to pay interest on the \napportioned General Provident Fund liability, at the rate as applicable for the \nrespective financial years. \n \n10-C the Powercom and Transco, shall be liable to pay Interest, as applicable to \nGeneral Provident Fund from time to time, on the net accruals (on monthly basis) \nof the General Provident Fund amount on and with effect from the 16th April, 2010 \nto the date of issuance of this notification, and thereafter all the General \nProvident Fund matters, shall be settled through trust. \n \n10-D Until otherwise directed by the State Government, the Powercom and \nTransco shall maintain common Trust for pension, gratuity, other terminal benefit \n\n11 \n \nliabilities and General Provident Fund, instead of individual Trusts for each of the \ncompanies and all the contributions shall be made to such Trusts in the aforesaid \nmanner.\" \n \n20. Regarding CPF contribution, it was submitted that during the year, only \nRs. 2.63 Crores was received from employees on account of subscription to CPF \nand the AO has wrongly disallowed Rs. 6.76 Crores which included Rs. 3.71 \ncrores being the opening balance of employees contribution to the fund and \nour reference was drawn to the following table: \nTable Showing Subscription and Payments on Account of CPF during A.Y. 2012-13 \n \n \nParticulars \nAmount(Rs.) \nAmount (Rs.) \n(A) \nOpening Balance of C.P. Fund (As \nper books of accounts) \n \n3,70,93,463 \n \nSubscription received during the year \n2,62,83,922 \n \n \nLess: Payments to employees during \nthe year \n1,10,262 \n \n(B) \nNet Accrual to CPF during the year \n \n2,61,73,660 \n \nClosing Balance of C.P. Fund (A+B) \n \n6,32,67,123 \n \n20.1 It was further submitted that only those employees who were appointed \non or after 01/01/2004 are covered under New Pension Scheme (CPF) of the \nGovernment of India and to deposit the same with Government, various \nformalities such as allocation of HOD code from the State Government, \nregistration of company with the NSDL, allotment of code / account no. to the \nemployees etc. took some time and reference was drawn to the sequence of \nevents which read as under: \n“1. \nAllotment of HOD code: Directorate of Disinvestment Finance Dep. Govt. \nof Punjab allotted state autonomous body code to ten State Autonomous Bodies \n(SABs)/PSU/ACI including PSPCL vide No. 111/123/07FD(Disc.) BA-2/3124-33 dated \n10.05.2011. \n2. \nDecision taken by BODs in its 16th meeting held on 15.12.2011 at Mohali \nBODs of PSPCL took the decision to authorize CAO/PSPCL to execute and sign on \nbehalf of PSPCL the documents regarding registration of PSPCL with various \nauthorities (i.e. NSDL/PFRDA). \n3. \nDirection of Punjab Govt.: Directorate of Disinvestment Finance Deptt. \nGovt. of Punjab directed PSPCL vide letter no. 111/123/07FD(Disc.) ABA-7261-70 \ndated 23.11.2011 to forward the required documents to Pension Fund Regulatory \n\n12 \n \nand Development Authority (PFRDA) with a copy to NPS Trust and NSDL-CRA for \nthe registration. \n4. \nDocuments forwarded: As per the above direction of Punjab Govt. the \nrequired documents for registration were forwarded to Dy. Gen Manager / PFRDA \nNew Delhi vide memo no. 31/21 dated 01/02/2012. \nJoint Direct (Finance & Accounts Directorate of Disinvestment Finance Deptt. \nPunjab was also requested to issue letter of confirmation to CRA regarding Govt. \nintent to extend the NPS to PSPCL vide letter memo no. 815/16 dated 01/02/2012. \nGovt. of Punjab Dept. of Finance Finally sent its request to NSDL regarding \nregistration of PSPCL under NPS vide memo no. 111/123/07FD(Disc) BA-2/6291 dt. \n13/08/2012. \n5. \nPFRDA Direction: PFRDA vide its letter dt. 31/08/2012 advised PSPCL to \nenter into dialogue with NSDL which is Central Record Keeping Agency (CRA) for \nthe NPS to finalize the modalities with regard to interfacing with CRA which \nincludes registration of Nodal Office. \nForwarding of N-2 and N-3forms: These forms of registration were forwarded to \nDirectorate of Disinvestment Finance Dep. Govt of Punjab directed PSPCL vide \nletter No. 10892 dated 31.10.2012 for forwarding the same to NSDL Mumbai. \nDTO and DDO numbers were allotted to PSPCL by NSDL \nRegistration of Subscribers / Allotment of Permanent Retirement Account \nNumbers (PRAN) PRAN allotment to each subscriber of NPS was a pre requisite of \nthis scheme. This way a very difficult job. These employees were scattered over \n160 DDO locations throughout Punjab. Application Forms of around 3320 \nemployees have been collected and forwarded to Central Record keeping \nAgency (CRA). Till date around 3300 PRANs have been allotted. \nUploading of Regular and Arrear Subscription: Regular updating of CPF \nSubscription was started from July 2013 onwards and arrear with interest was also \nuploaded and deposited with due course of time (as per instructions issued by \nDeputy Director Pension Punjab Govt. vide memo no. 6/17/2009-6/863 dated \n12/07/2010)/ the entire arrear amount with valid PRANs has been deposited \nnow.” \n20.2 It was accordingly submitted that as per the direction of the Government \nthe above amount has been retained under compulsion and not by choice and \ntherefore, there should not be any disallowance for tax purpose in the hands of \nthe assessee company. The ld AR accordingly supported the order and findings \nof the ld CIT(A). \n21. We have heard the rival contentions and purused the material available \non record. The issue under consideration is broadly two fold namely, deposit of \n\n13 \n \nGPF contribution which has been collected by the assessee company from its \nemployees towards the GPF subscription during the year and whether any \ndisallowance is called for under relevant provisions of the Act. The second issue \nrelates to employees share of CPF/NPS contribution which has been collected \nby the assessee company from its employees during the year as well as its \ncorresponding contribution by the assessee company as an employer and \nwhether any disallowance is called for in respect of employee and employer \nshare of CPF/NPS contribution under relevant provisions of the Act. \n22. Firstly, as regards the GPF contribution collected by the assessee company \nfrom its employees during the year is concerned, it has been submitted that the \nerstwhile PSEB was following its own Provident Fund Regulation, 1960 in terms of \nSection 79(c) of the Electricity (Supply) Act, 1948 for the purposes of establishing \nand maintaining provident fund for the benefit of its employees and the said \nregulations continued to be followed by the assessee company, being one of \nthe companies formed as a result of unbundling of the PSEB for the impugned \nassessment year. It has been further submitted that as per the said Regulation, \nseparate accounts are maintained for each subscriber/employee which show \nhis amount of subscription/contribution for the year alongwith interest \ncalculated as per the regulations, withdrawals, etc and the same are duly \nadministered by and records are duly maintained by the drawing and disbursing \nofficer and that the subscriptions so received from the employees have in effect \nbeing deducted while disbursing the salary to the employees for the relevant \nmonth and on real time basis, have been credited in respective subscription \naccount of the employees and in this regard, reference was drawn to \nRegulations 11 and 11-A of the PF Regulations which reads as under: \n“11. An account shall be prepared in the name of each subscriber and shall show \nthe amount of his subscription with interest thereon calculated as prescribed in \nsub-regulation (2) of Regulation 16. \n \n\n14 \n \n11-A i) Parallel CP. Fund Accounts shall be maintained m tin G.P. Fund pass \nbooks for all the subscribers who subscribe to the G.P. Fund, by their respective \ndrawing and disbursing Officers. \n \nii) \nThe G.P. Fund Pass Books will be kept up to date by the \nDrawing Disbursing Officers and shall be maintained as service record of the \nsubscriber and will be transferred alongwith the service book of the official on the \neve of his transfer. \n \niii) \nIn \ncase \nof \nGazetted \nOfficers \nthe \nentries \nin \nthe \nG.P. \nFund \nPass \nBooks \nshall \nbe \nmade \nby \nthemselves \nand \ngot \nverified \nfrom their respective disbursing officers periodically These pass books shall be \nsurrendered by them to their respective disbursing officers at the time of claiming \nfinal payment.” \n \n23. \nIt was further submitted that during the year, there were subscriptions \nreceived from the employees to the tune of Rs 5,20,21,62,917/- and there were \ndisbursal to the tune of Rs 4,22,79,85,058/- and the said subscriptions and \ndisbursals have been duly credited on real time basis and reflected in the \nrespective subscription account of the employees and there is no dispute in this \nregard. We therefore find that in the instant case, the provident fund was \nmaintained and administered by the erstwhile PSEB and thereafter, by the \nassessee company internally in terms of the PF Regulations as so authorized by \nthe Electricity (Supply) Act, 1948 and the yearly subscriptions have been \ncredited on real time basis in the individual account of respective employees. \nThe ld CIT(A) has duly taken into consideration the said PF regulations while \nallowing relief to the assessee company. No dispute has been raised by the \nRevenue as far as the assessee not following the said PF Regulations and any \nviolations/irregularities in administering the same as pointed out by any \nauthorities. Therefore, in absence of any adverse material on record, we uphold \nthe order of the ld CIT(A) whereby he has allowed the relief to the assessee \ncompany as far as GPF contribution is concerned. \n \n24. \nNow, coming to the second issue of employees share of CPF contribution \nwhich has been collected by the assessee company from its employees during \n\n15 \n \nthe year as well as corresponding contribution by the assessee company as an \nemployer and whether the same is allowable for tax purposes in the hands of \nthe assessee. \n25. \nIt is an admitted fact that these contributions relates to employees \nrecruited on or after 01/01/2004 who are covered under the New Pension \nScheme(NPS) of Government of India and who has since been transferred to \nand on the payrolls of the assessee company post unbundling of the PSEB and \nsteps were taken by the assessee company to operationalize the deposit of \nthese contributions in the respective employee’s account under the NPS during \nthe financial year relevant to the impugned assessment year as well as in the \nsubsequent period whereby regular uploading of CPF contribution was finally \nstarted in July 2013 onwards and entire arrears along with interest was deposited \nby the assessee company. \n26. \nThe ld CIT(A) has also returned a similar finding that these contributions \nwere deposited by the assessee company once the notification dated \n24/12/2012 was complied with and the systems for deductions and transmissions \nto PF head were put in place and interest for delayed payments was also paid \nby the assessee company. \n27. \nThe subsequent findings of the ld CIT(A), however, has not found favour \nwith the Revenue and is under challenge before us. In the said findings, the ld \nCIT(A) stated that since this was a onetime default arising out of restructuring \nand consequent fresh systems being put in place and the fact that company \nhas demonstrated that there was no delay attributable to it, the same were held \nallowable for period of restructuring since the same were remitted with a delay \nfor reasons beyond the control of the assessee company. \n28. \nAs rightly pointed out by the ld CIT/DR to which the ld AR didn’t raise any \nspecific objection, the relevant provisions under which the contributions have \n\n16 \n \nbeen held allowable has not been referred and specifically dealt with by the ld \nCIT(A) especially where specific provisions have been introduced by the \nFinance Act, 2011 w.e.f 1-04-2012 relevant to impugned assessment year 2012-\n13 in so far as contribution by the assessee as an employer towards NPS is \nconcerned in terms of section 36(iva) read with existing provisions of section \n43B(b), and in so far as amount deducted/received by the assessee from its \nemployees as their share of contribution towards NPS is concerned, how the \nprovisions of section 36(1)(va) are satisfied in the instant case has not been spelt \nout by the ld CIT(A). \n29. \nIt would therefore be relevant to refer to these provisions and applicability \nthereof in the instant case especially whether the provisions talks about the \ntimelines/due date for deposits of contributions so received, delayed \ncontribution for reasons beyond the control of the assessee company and \nallowance thereof for tax purposes. \n30. \nThe Finance Act, 2011 has introduced Section 36(iva) which provides that \nany sum paid by the assessee as an employer by way of contribution towards a \npension scheme, as referred to in section 80CCD, on account of an employee \nto the extent it does not exceed ten per cent of the salary of the employee in \nthe previous year shall be allowed in computing the income referred to in \nsection 28 of the Act. \n31. \nFurther, Section 40(A)(9) has been simultaneously amended by the \nFinance Act, 2011 and the amended provisions provide that no deduction shall \nbe allowed in respect of any sum paid by the assessee as an employer towards \nthe setting up or formation of, or as contribution to, any fund, trust, company, \nassociation of persons, body of individuals, society registered under the Societies \nRegistration Act, 1860(21 of 1860), or other institution for any purpose, except \nwhere such sum is so paid, for the purposes and to the extent provided by or \n\n17 \n \nunder clause(iv) or clause (iva) or clause(v) of sub-section (1) of section 36, or as \nrequired by or under any other law for the time being in force. \n32. \nThe scope and effect of insertion of section 36(iva) as well as amendment \nto section 40A(9) has been discussed in the CBDT Circular no. 2 of 2012 dated \n22/05/2012 and the relevant contents thereof read as under: \n“10.3 Under the existing provisions of the 1961 Act, the contribution made by an employer \ntowards a recognised provident fund, an approved superannuation fund or an approved \ngratuity fund is allowable as a deduction from business income under clauses (iv) and (v) \nrespectively, of section 36(1), subject to certain limits. However, section 36 does not \nprovide for a similar deduction from business income in respect of the contribution made \nby the employer, on behalf of the employee, to the New Pension System (NPS) account. \n \n10.4 Section 36 has been amended by insertion of a new clause (iva) in sub-section (1), to \nprovide that any sum paid by the assessee as an employer by way of contribution towards \na pension scheme on the behalf of an employee to the New Pension System (NPS) \naccount, as referred to in section 80CCD shall be allowed as deduction in computing the \nincome of the employer under the head \"Profits and gains of business or profession\", to the \nextent it does not exceed ten per cent, of the salary of the employee in the previous year. \n \n10.5 Section 40A deals with expenses or payments not deductible in certain \ncircumstances. Section 40A(9) has been amended to provide that a contribution made \nfor the purposes and to the ex- tent provided under section 36(1)(iva) would not be \ndisallowed as a deduction in the hands of the employer. \n \n10.6 Applicability. These amendments take effect from 1-4-2012, and will, accordingly, \napply in relation to the assessment year 2012-13 and subsequent years.\" \n33. \nFurther, we refer to the provisions of Section 43B(b) which provides that: \n“43B. Notwithstanding anything contained in any other provision of this Act, a deduction \notherwise allowable under this Act in respect of – \n(a)….. \n(b) \nany sum payable by the assessee as an employer by way of contribution to any \nprovident fund or superannuation fund or gratuity fund or any other fund for the welfare of \nemployees. \n34. On a combined reading of the aforesaid provisions, the legal position that \nemerges is that the assessee company is now eligible to claim its share of \ncontribution as an employer towards NPS w.e.f 1-04-2012 as a deduction while \ncomputing its income under the head “Profits and gains from business or \nprofession”. However, there is a restriction on the quantum of such contribution \n\n18 \n \nwhich can be claimed and which has been restricted by the statue to the \nextent of 10% of the salary of the employees in the previous year as so defined. \nSecondly, the quantum of deduction so determined shall be allowed as a \ndeduction in the previous year when such contribution is actually paid by the \nassessee. The emphasis is therefore on the actual payment and the year it shall \nbe paid, the deduction shall be allowed, which in effect, means that it has an \ninbuilt mechanism to cater to the delayed deposit of contribution. Further, no \nexplanation or corroboration is required to explain the delay so long as the \namount is actually paid. It has been further provided that where such \ncontribution is paid on or before the due date of filing of return of income u/s \n139(1) in respect of the previous year in which the liability to pay such \ncontribution was incurred, the same shall be allowed in the said previous year \nsubject to furnishing of necessary evidences in support thereof. In other words, \nthe delayed contribution upto the date of filing of return can be claimed in the \nyear in which the liability to pay was incurred and the assessee need not wait for \nthe subsequent financial year, being the year of actual payment, to claim the \nsaid amount. \n35. In the instant case, it is an admitted and undisputed position that in respect \nof employees recruited on or after 01/01/2004 who are covered under the NPS \nScheme and are on payroll of the assessee company, the assessee company \nhas not paid/deposited its own share of contribution as an employer towards \nNPS either during the previous year or on/before the due date of filing of the \nreturn of income for the impugned assessment year. In view of the same, where \nthe test of actual payment not being satisfied, we are of the considered view \nthat the assessee shall not be eligible to claim such contribution as eligible \ndeduction while computing its income under the head “profits and gains from \nbusiness or profession” for the impugned assessment year 2012-13. At the same \ntime, the assessee is eligible to claim the said contribution in the subsequent \n\n19 \n \nyear(s) when it is actually paid and the assessee is at liberty to claim the same in \nthe respective assessment year(s) as so advised and the AO shall allow the \nsame after examining the necessary evidence in support thereof. \n36. \nNow, coming to the matter relating to the amount received by the \nassessee from its employees as latter’s share of contribution towards NPS, we \nfind that the provisions of section 36(1)(va) need to be examined to see whether \nthe same are satisfied or not in the instant case. \n37. \nThe said provisions provide that where any sum is received by the \nassessee from any of his employees to which the provisions of sub-clause (x) of \nclause (24) of section 2 apply and where such sum is credited by the assessee to \nthe employee's account in the relevant fund or funds on or before the due \ndate, it shall be allowed as a deduction in the hands of employer assessee. \n38. \nFurther, sub-clause (x) of clause (24) of section 2 provides that any sum \nreceived by an employer from his employees as a contribution to any provident \nfund or superannuation fund or any fund set up under the provisions of the \nEmployees state insurance, 1948, or any other fund for the welfare of such \nemployee shall be deemed as income of the employer. \n39. \nIn the instant case, the assessee company has received the sum from its \nemployees \n(by \nway \nof \ndeduction \nfrom \nsalary \nat \nthe \ntime \nof \ndisbursement/payment of salary), their share of contribution (employee’s share) \ntowards NPS which is clearly a fund/scheme for the welfare of such employees. \nThus, the provisions of section 36(1)(va) read with section 2(24)(x) are attracted \nin the instant case as far as employee share of NPS contribution is concerned. \n40. \nIn this regard, what needs to be examined is whether the employee share \nof contribution so received by the assessee company is credited by it to the \nemployee's account in the relevant NPS fund/Scheme on or before the due \ndate. The term “due date” has been defined in the explanation to section \n\n20 \n \n36(1)(va) to mean the date by which the assessee is required as an employer to \ncredit an employee's contribution to the employee's account in the relevant \nfund under any Act, rule, order or notification issued thereunder or under any \nstanding order, award, contract of service or otherwise. Here, it is relevant to \nnote that NPS fund/scheme is managed and administered externally unlike the \nearlier fund which was managed and administered internally by the assessee \ncompany. \n41. \nIn case of Adani Electricity Mumbai Ltd Vs AO/CPC (ITA No. 543/Ahd/2024 \ndated 14/10/2024), we find that the Coordinate Ahmedabad Benches were \nceased of a similar matter where the matter relating to allowance of employee \nshare of NPS contribution came up for its consideration. The Coordinate Bench \naccepted the arguments on behalf of the assessee that the National Pension \nScheme (NPS) is governed by the Pension Fund Regulatory and Development \nAuthority (PFRDA) and that the PFRDA Act, 2013 does not specify a due date for \ncontributions to NPS accounts. Further, the Coordinate Bench referred to the \nprovisions of the Central Civil Services (Implementation of National Pension \nSystem) Rules, 2021 which interalia prescribes time limes or date by which \nemployees’ contribution to NPS has to be deposited, however, distinguished the \ncase of the assessee, being a private limited company and held that these rules \nshall only apply to the Government servants, including civilian Government \nservants in the Defence Services, appointed substantively to Civil Services and \nposts in connection with the affairs of the Union and didn’t agree with the \ncontention so raised on behalf of the Revenue to apply the same in case of the \nassessee, being a private limited company. Further, the Coordinate Bench held \nthat given that all payments towards employee share of NPS contribution were \nduly made before filing of return of income as per section 139(1) of the Act, the \nadjustment made by CPC was not justified and amount in question was held as \nallowable under the Act. \n\n21 \n \n42. \nThe Central Civil Services (Implementation of National Pension System) \nRules, 2021 which have been notified on 30/03/2021 (and made effective from \nthe date of said notification) provides that these rules shall apply to the \nGovernment servants, including civilian Government servants in the Defence \nServices, appointed substantively to civil services and posts in connection with \nthe affairs of the Union on or after 1st day of January, 2004, but shall not apply \nto,- (a) Railway servants; (b) persons in casual and daily rated employment; (c) \npersons paid from contingencies; (d) members of the All India Services; (e) \npersons locally recruited for services in diplomatic, consular or other Indian \nestablishments in foreign countries; (f) persons employed on contract; (g) \npersons whose terms and conditions of service are regulated by or under the \nprovisions of the Constitution or any other law for the time being in force; and (h) \npersons to whom the Central Civil Services (Pension) Rules, 1972 apply in \naccordance with any special or general order issued by the Government. \n43. \nFurther, Rule 6 of the aforesaid Rules talks about the contribution by the \nsubscriber to the National Pension System and the same reads as under: \n“6. Contribution by the Subscriber to the National Pension System.- (1) The National Pension \nSystem shall work on defined contribution basis. A Subscriber shall make a contribution of \nten per cent or such other percentage as may be notified from time to time, of his \nemoluments to the National Pension System every month. The amount of contribution \npayable shall be rounded off to the next higher rupee. \n(2) Contribution may be made by the Subscriber, at his option, during the period of \nsuspension: Provided that where, in the final orders passed by the Government on \nconclusion of the inquiry, the period spent under suspension is treated as duty or leave for \nwhich leave salary is payable, contributions to the National Pension System shall be \ndetermined based on the emoluments which the Subscriber becomes entitled to for the \nperiod of suspension. The difference of the amount of contribution to be deposited and \nthe amount of contribution already deposited during the period of suspension, shall be \ncredited to the Individual Pension Account of the Subscriber along with interest. The rate of \ninterest for this purpose would be the rate of interest as decided by the Government from \ntime to time for the Public Provident Fund deposits. \n(3) No contribution shall be made by the Subscriber during the period of absence from \nduty (whether on leave or otherwise) for which no pay or leave salary is payable. \n(4) During the period of transfer on deputation to a Department or organisation under the \nCentral Government or the State Government, the Subscriber shall remain subject to these \nrules in the same manner, as if he was not so transferred or sent on deputation and will \n\n22 \n \ncontinue to contribute towards National Pension System based on emoluments worked out \nin accordance with sub-rule (5) of rule 5. \n(5) Contributions in respect of any arrears of salary received by the Subscriber due to \nretrospective increase shall be treated as the contributions for the month in which the \npayments are made. \n(6) The Subscriber shall contribute toward National Pension System during the period spent \nunder probation. \n(7) Deduction and crediting of contributions to the Individual Pension Account during \nforeign service in India or outside India, including deputation to United Nations’ Secretariat \nor other United Nations’ Bodies, the International Monetary Fund, the International Bank of \nReconstruction and Development, or the Asian Development Bank or the Commonwealth \nSecretariat or any other International organisation, shall be regulated in accordance with \nthe instructions issued by the Department of Personnel and Training from time to time and \nthe procedure laid down by the Authority. \n(8) The Drawing and Disbursing Officer shall deduct the contribution from the salary of the \nGovernment servant and send the bill to the Pay and Accounts Officer or Cheque \nDrawing and Disbursing Officer, as the case may be, along with details of contributions \ndeducted in respect of each Subscriber on or before Twentieth day of each month. \n(9) A Subscriber may, at his option, make contribution in excess of the contribution \nspecified in sub-rule (1) in accordance with the procedure laid down by the Authority and \nthe Government. \n(10)(i) The Pay and Accounts Officer or the Cheque Drawing and Disbursing Officer, as the \ncase may be, based on the details of contributions in respect of each Subscriber sent by \nthe Drawing and Disbursing Officer to Pay and Accounts Officer or Cheque Drawing and \nDisbursing Officer under sub-rule (8), shall prepare and upload a Subscription Contribution \nFile and generate a Transaction ID by Twenty- fifth day of each month. \n(ii) The Pay and Accounts Officer or the Cheque Drawing and Disbursing Officer, as the \ncase may be, shall remit the contribution to the Trustee Bank through the Accredited Bank \nby the last working day of each month : \nProvided that the contribution for the month of March shall be remitted by the Pay and \nAccounts Officer or the Cheque Drawing and Disbursing Officer to the Trustee Bank \nthrough the Accredited Bank on the first working day of the month of April. \n(iii) In case of delay in crediting of contribution to the Individual Pension Account of the \nSubscriber beyond the prescribed timeline due to factors not attributable to the \nSubscriber, the amount shall be credited to the Individual Pension Account of the \nSubscriber along with interest for the delayed period, as determined in accordance with \nrule 8.” \n44. \nThe aforesaid rules, though having come into force on 30/03/2021 and \nstrictly not applicable for the impugned assessment year, lays down a detailed \nmechanism and give us a broad sense in terms of how the NPS scheme has \nbeen envisaged to be implemented by the Government. It provides that a \nSubscriber shall make a contribution of ten per cent or such other percentage \nas may be notified from time to time, of his emoluments to the National Pension \n\n23 \n \nSystem every month, it talks about the situation relating to suspension, absence \nfrom duty, foreign deputation, etc. It further provides that the Drawing and \nDisbursing Officer shall deduct the contribution from the salary of the \nGovernment servant and send the bill to the Pay and Accounts Officer along \nwith details of contributions deducted in respect of each Subscriber on or \nbefore Twentieth day of each month, the Pay and Accounts Officer thereafter \nshall prepare and upload a Subscription Contribution File and generate a \nTransaction ID by Twenty- fifth day of each month and shall remit the \ncontribution to the Trustee Bank through the Accredited Bank by the last working \nday of each month and for the month of March, the amount shall be remitted \non the first working day of the month of April. It further provides that in case of \ndelay in crediting of contribution to the Individual Pension Account of the \nSubscriber beyond the prescribed timeline due to factors not attributable to the \nSubscriber, the amount shall be credited to the Individual Pension Account of \nthe Subscriber along with interest for the delayed period, as so determined. \n45. \nIn the instant case, we find that the assessee company, being a state \ngovernment undertaking under the administrative control of Government of \nPunjab, having decided to implement the NPS scheme, is likely to be guided by \nthe aforesaid Central Civil Services (Implementation of National Pension System) \nRules, 2021; and are applicable to the government employees in the state of \nPunjab and similar timelines are specified for deposit of NPS contribution and in \ncase of delayed contribution, similar provisions relating to deposit along with \ninterest subject to modification, if any have been instructed as can be seen \nfrom the assessee’s written submission where it talks about memo no. 6/17/2009-\n6/863 dated 12/07/2010 issued by the Deputy Director, Pension, Government of \nPunjab pursuant to which all arrears including interest was deposited by the \nassessee company. It cannot therefore be denied that there are timelines/due \ndate which the employer has to adhere to while remitting and crediting the \n\n24 \n \ncontribution to the individual pension account of the subscriber. However, in \nabsence of specifics in the instant case as to the timelines so laid down by the \nGovernment of Punjab and as applicable to the assessee and that too for the \nimpugned assessment year, we would restrain ourselves in terms of examining \nthis aspect any further as to the exact timelines and due dates of such deposits. \n46. \nNotwithstanding as to what are the timelines so specified, the admitted \nfacts in the instant case are that the contribution so received by the assessee \nfrom its employees has infact not been deposited/credited to the employee's \naccount in the relevant NPS fund/Scheme during the whole of the financial year \n2011-12 and such contributions were infact deposited, well after the end of the \nimpugned assessment year 2012-13, starting July 2013 onwards as so stated by \nthe assessee as part of its written submissions. \n47. \nIn terms of Section 2(24)(x), as soon as the assessee is in receipt of the sum \nfrom its employees being latter share of NPS contribution, it will be deemed as its \nincome of the relevant financial year. The provisions of section 36(1)(va) \nhowever, allows a corresponding deduction subject to the fact that such sum of \nmoney is actually paid by the assessee by way of credit to the account of \nemployee in the NPS Fund/scheme and the amount is not just paid but paid on \nor before the due date. The Hon’ble Supreme Court in case of Checkmate \nServices (supra) also held that it is upon deposit, in terms of those enactments \nand on or before the due dates mandated by such concerned statute, that the \namount which is otherwise retained, and deemed an income, is treated as a \ndeduction. Both the provisions where read and implemented together provides \nthe necessary mechanism whereby the receipts are firstly treated as deemed \nincome and subsequently, the deposit of employee share of NPS contribution \nare treated as allowable deduction, without any tax consequences in the \nhands of the employer assessee for the relevant period. Therefore, the emphasis \non payment/credit as employed in section 36(1)(va) is clearly in a restricted \n\n25 \n \nsense and have to be read in the context of the relevant financial year and in \nany case, it cannot be stretched beyond the end of the financial year except \nfor the contribution for the month of march which can be deposited within a \nreasonable period of time. In light of aforesaid discussion, the amount \ndeducted/received by the assessee from its employees as latter’s share of \ncontribution towards NPS shall be treated as deemed income under Section \n2(24)(x), and having admittedly not paid the same before the end of the \nfinancial year shall not be eligible for deduction under section 36(i)(va) and shall \nthus be subject to tax in the hands of the assessee company for the impugned \nassessment year 2012-13. \n48. \nDuring the course of hearing, the ld AR has submitted that the AO has \nwrongly considered the quantum of employee share of NPS contribution. It has \nbeen submitted that only Rs 2.63 crores has been received from employees \ntowards their share of contribution as against the figure of Rs 6.76 crores \nconsidered by the AO. In this regard, as we have noted above, the AO has not \njust disallowed the employee’s share of NPS contribution but has also disallowed \nemployer’s share of NPS contribution which, as per AO, comes to Rs 6.76 crores. \nIn view of the same, we donot see any infirminity in action of the AO in \nquantifying the amount of NPS contribution. \n49. \nIn light of aforesaid discussion and in the entirety of facts and \ncircumstances of the case, in far as employee share of GPF contribution of Rs \n253,79,15,803/- is concerned, we uphold the order of the ld CIT(A) and the \nmatter is decided in favour of the assessee company and against the Revenue. \nSecondly, in respect of the employer’S share of CPF/NPS contribution is \nconcerned, the assessee shall not be eligible to claim such contribution as \neligible deduction while computing its income under the head “profits and \ngains from business or profession” for the impugned assessment year 2012-13. At \nthe same time, the assessee is eligible to claim the said contribution in the \n\n26 \n \nsubsequent year(s) when it is actually paid and the assessee is at liberty to claim \nthe same in the respective assessment year(s) as so advised and the AO shall \nallow the same after examining the necessary evidence in support thereof. And \nlastly, in respect of employee share of CPF/NPS contribution is concerned, the \nshall be treated as deemed income under Section 2(24)(x) and shall not be \neligible for deduction under section 36(i)(va) and will be subject to tax in the \nhands of the assessee company for the impugned assessment year 2012-13. In \nthe result, employer as well as employee share of NPS contribution of Rs \n6,76,69,332/- is to be brought to tax for the impugned assessment year 2012-13 \nand the order of the ld CIT(A) is hereby set-aside and that of the AO is sustained \nand the matter is decided in favour of the Revenue and against the assessee \ncompany. \n50. \nIn the result, the appeal of the Revenue is partly allowed. \n51. \nIn ITA No. 645/Chd/2023 for A.Y 2013-14, the Revenue has raised the \nfollowing grounds of appeal: \na. Whether on the facts & in the circumstances of the case, the Ld. CIT(A) was right in law \nin deleting the addition on account of non-payment of CPF and GPF amounting to Rs. \n503,46,41,315/- which is against facts and bad in law. \nb. Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has fallen in \nerror by not following the legal maxim that tax statutes are to be strictly construed, as held \napplicable by the Hon’ble Supreme Court in PCIT Vs. M/s Aarham Softronics Civil Appeal \nNo. 1784 of 2019. \nc. Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has fallen in \nerror by not following the legal maxim that concepts such as equity, hardship or \ncompulsion have no place in taxation statutes. \nd. Whether on the facts & in the circumstances of the case, the Ld CIT(A) has erroneously \nnot followed the binding judgment of Hon’ble Supreme Court in the case Checkmate \nServices Pvt. Ltd. Vs. CIT Civil Appeal No. 2833 of 2016. \ne. The appellant craves leave to add, amend or delete any of the grounds of appeal \nduring the appellate proceedings. \n52. \nBoth the parties submitted that the facts and circumstances are exactly \nidentical as in ITA No. 659/Chd/2023 and similar contentions as raised therein \nmay be considered in the context of the present appeal. Admittedly, given the \n\n27 \n \nidentical facts and circumstances of the case as so submitted by both the \nparties, our findings and directions contained in ITA No. 659/Chd/2023 shall \napply mutatis mutandis to the present appeal. \n53. \nIn the result, both the appeals filed by the Revenue are partly allowed. \nOrder pronounced in the open Court on 28/11/2024 \n Sd/- \n \n \n \n \n \n \n \n \n Sd/- \n \nपरेश म. जोशी \n \n \n \n \n \n िवŢम िसंह यादव \n (PARESH M. JOSHI) \n \n \n \n \n \n (VIKRAM SINGH YADAV) \n \nɊाियक सद˟ / JUDICIAL MEMBER \n \n \n \n \nलेखा सद˟/ ACCOUNTANT MEMBER \n \n \n \nAG \n \n \nआदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : \n \n1. अपीलाथŎ/ The Appellant \n2. ŮȑथŎ/ The Respondent \n3. आयकर आयुƅ/ CIT \n4. आयकर आयुƅ (अपील)/ The CIT(A) \n5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH \n6. गाडŊ फाईल/ Guard File \nआदेशानुसार/ By order, \nसहायक पंजीकार/ Assistant Registrar \n \n"
Mehul