The Delhi High Court has held that provident fund (PF)and Employee State Insurance (ESI) amount paid after due date due to National Holiday is amenable to deduction.
M/s. Aero club, the appellant questioned whether the Income Tax Appellate Tribunal [“Tribunal”] misdirected itself on facts and in law in failing to notice that Rs. 44,28,453/-, the amount payable towards the PF and Rs. 72,131/-, the amount payable towards the ESI, fell due on a National Holiday i.e., 15.08.2018 and therefore the deposit made on the following date i.e., 16.08.2018 was amenable to deduction?
ESI is a contributory fund that enables Indian employees to participate in a self-financed, healthcare insurance fund with contributions from both the employee and their employer. The scheme is managed by Employees’ State Insurance Corporation, a government entity that is a self-financing, social security, and labor welfare organization.
The Employees Provident Fund (EPF) is a Contributory fund with contributions from both the employee and their employers. EPF is a compulsory and contributory fund for Indian organizations under “The Employees’ Provident Fund and Miscellaneous Provisions Act 1952”.
The division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia relied on the decision of the court in the case of Pepsico ltd, wherein it was held that “ since the due date fell on a date which was a National Holiday, the deposit could have been made by the respondent/assessee only on the date which followed the National Holiday. Section 10 of the General Clauses Act would help the respondent/assessee to tide over the objections raised on behalf of the appellant/revenue.”
The question of law, as framed, is answered in favour of the appellant/assessee and against the respondent/revenue.
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