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TMI Blog2021 (7) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... addition of Rs. 51,11,745/- made on account of disallowance of belated payment of employee's contribution towards EPF amounting to Rs. 43,33,303/- and employees' contribution towards ESI amounting to Rs. 7,78,442/- While upholding the disallowance Ld. CIT(A) has failed to appreciate that the disallowance could not be made: a. As the payment towards employee's contribution of ESI and PF have been made either during the financial year under consideration or before the due date of filing of return as described in section 139(1) of the Income Tax Act, 1961.As per the landmark judgment passed by the Hon'ble Supreme Court in the case of CIT vs. Alom Extrusions Ltd. [(2009) 185 Taxman 416 (SC)]wherein it was held that the 'due date' means the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces of the case, the payment only of Rs. 2,22,538/- (Rs. 1,12,040 on 12-04-2017 + Rs. 1,10,498/- on 26- 04-2017) may be disallowed having been made beyond the financial year, since all other payments have been made within the relevant financial year. 3. Without prejudice to the above, if the disallowance Rs. 51,11,745/- is to be upheld in its entirety then the same may be directed to be allowed in the A.Y. 2018-19. 4. That under the facts and circumstances of the case Ld. CIT (A) has erred in law and in fact in restoring the matter back to the file of AO on the issue of disallowance of Rs. 7,75,519/- being the profit on sale of fixed assets particularly in view of the fact that all the facts were place before him and it was clear from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account considered under other heads of income and rectify the mistake. b. Second error was also notified by the CPC stating that disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the income tax return u/s 143 (1) (a) (iv) stating that any sum received from employees as a contribution to any provident fund or superannuation fund or any fund set up Under the ESI act or any other fund only welfare of employees to the extent not credited to the employees account on or before the due date u/s 36 (1) (va) . The response submitted by the assessee states that this amount was duly deposited by assessee before the due date of filing of income tax return u/s 139 (1) of the income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was determined at Rs. 69,851,743/- against the returned income under that head of Rs. 63,964,479/-making the adjustment on account of profit and loss on sale of businesses of the 7,74,590/- and Rs. 5,111, 741/- being the amount of contribution received from the employees not deposited within the due date prescribed under the respective law. 5. Assessee aggrieved with the above information u/s 143 (1) of the income tax and has preferred an appeal before the LD CIT (A) who passed an order on 03.02.2020 partly allowing the appeal of the assessee. With respect to the addition of Rs. 51,11,745/- , he gave a direction to the ld AO to allow the claim of the assessee as per the law laid down by Hon'ble Delhi High Court in CIT Vs. Bharat Hote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been correctly made. He referred to copy of the ledger account of the assessee and Profit and loss account . Thus, he submitted that the adjustment made by the centralized processing centre are erroneous and the learned CIT - A was also in error in directing the learned assessing officer to verify the claim of the assessing relying on the decision of the honourable Delhi High Court which is against the assessee so far as the issue of deposit of provident fund of employees contribution is concerned. He further submitted that the second adjustment of profit on sale of fixed assets is also apparent it cannot be adjusted. Therefore the CIT appeal should have deleted the addition holding that they could not have been made u/s 143 (1) of the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of Chapter VI-A under the heading "C.-Deductions in respect of certain incomes", if] the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Both the adjustment made by the centralised processing centre, it is stated that assessee has made an incorrect claim. Therefore, centralized processing centre has invoked clause 143 (1) (a) (ii) of the act. Thus according to the centralized processing centre the claim of the assessee of deduction of deposit of employees provident fund contribution to the credit of the employees' account though beyond the due date de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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