EPF Contribution Paid Next Day After National Holiday, Delhi High Court Allows Deduction As Due Fell On National Holiday

The Delhi High Court has allowed the deduction for the employee’s contribution towards the provident fund as the due date fell on a national holiday.

The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that since the due date fell on a date that was a national holiday, the deposit could have been made by the respondent or assessee only on the date that followed the national holiday.

The respondent/assessee submitted that the deposit of the employee’s contribution towards the provident fund was made on August 16, 2018, following a national holiday, i.e., August 15, 2018. The deduction claimed would have to be allowed, as steps had been taken by the respondent/assessee towards the deposit of the amount on August 14, 2018.

The Assessing Officer (AO) disallowed the deduction, as the due date was August 15, 2018.

The assessee filed the appeal before the tribunal. The tribunal held that even if employees’ contributions concerning the provident fund and towards insurance were deposited beyond the date prescribed under the subject statute, it would be allowable as a deduction to the employer or assessee.

The department contended that the respondent/assessee had deposited the employee’s contribution towards the provident fund amounting to Rs. 1,56,12,404/- on August 16, 2018. The Assessing Officer (AO) had rightly disallowed the deduction, as the due date was August 15, 2018.

The court dismissed the department's appeal and held that the contribution to the Employee’s Provident Fund is allowable as deposited immediately after a national holiday.

Counsel For Petitioner: Puneet Rai

Counsel For Respondent: Deepak Chopra

Case Title: PCIT Versus Pepsico India Holding Pvt. Ltd.

Citation: 2023 LiveLaw (Del) 917

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