TMI Blog2021 (8) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... F though paid well before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted as the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act in view of the binding decision of the Hon ble Rajasthan High Court. Appeal of the assessee is allowed. - ITA. No. 40/JP/2021 - - - Dated:- 16-8-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Mukesh khandelwal (C.A.) For the Revenue : Smt. Monisha Choudhary (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Delhi (NFAC) dated 26.04.2021 for the assessment year 2019- 20 wherein the assessee has raised the following grounds of appeal:- 1. That the order passed by ld. CIT(A) is against the principles of natural justices as the same has been passed without considering the submissions given by the appellant in the online account of Web portal of the department. 2. That the order passed by ld. CIT(A) is bad in law as he failed to appreciate that disallowance under section 36(1)(va) is highly debatable issue and hence such adjustment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jasthan High Court. However, the ld CIT(A) has sustained the above adjustment by relying on the judgment of the Hon ble Madras, Gujarat and Kerala High Court. Against the said order, the assessee is in appeal before this Tribunal. 3. In ground No. 2, the assessee has challenged the addition by way of adjustment as not permissible while processing the return U/s 143(1)(a) of the IT Act. 4. It was submitted by the ld AR that this ground was not taken before the Ld. CIT (A) due to inadvertent mistake. However, a request has been made to admit this ground being purely legal in nature and which goes to the root of the matter and is covered with the judgment of the Hon ble Supreme Court in the case of NTPC 229 ITR 383. 5. It was submitted that provisions of section 143(1)(a) allows following types of adjustments to be made while processing the return of income:- i. Any arithmetical error ii. Any incorrect claim, if same is apparent from any information in return iii. Claim of set off of carried forward loss, if the return for the year of loss was furnished beyond stipulated date u/s 139(1) iv. Disallowance of expenditure indicated in the audit report but not taken in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of employees contribution to welfare funds is highly debatable issue and hence such disallowance could not have been made u/s 143(1)(a) while processing the return u/s 143(1)(a). There are various High Courts including the jurisdictional High Court of Rajasthan wherein it has been held that employees contribution to welfare payment is allowable deduction if deposited prior to prescribed date of filing ITR u/s 139(1) whereas there are certain High Courts including Gujarat High Court who have held such sums to be not deductible if deposited after the prescribed date under respective statute. Therefore the action of disallowing such amounts while processing the return is not accordance with law and requires to be reversed. 8. In ground No. 3, the assessee has challenged the sustenance the disallowance made by AO for ₹ 1,61,099/-. It was submitted that the ld. CIT (A) has relied on the case of Hon ble Madras, Gujarat and Kerala High Court for sustaining the disallowance made by the CPC while processing the return. The Ld. CIT (A) forgot to take into consideration the reply filed by the assessee on the communication issued by CPC for making the disallowance on account of employ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted before due date of filing the return u/s 139(1) of the Income Tax Act, 1961. It was submitted that the above decisions of the Hon ble jurisdictional High Court of Rajasthan clearly lays down the proposition that employees contribution to PF/ESI deposited lately than prescribed dates under respective statute but deposited prior to date u/s 139(1) is an allowable deduction. 11. Per contra, the ld. DR objected to the raising of the additional ground of appeal and it was submitted that the assessee has failed to raise the same before the ld CIT(A) and hence, the same may not be entertained at this stage of the appellate proceedings. It was further submitted that there has been a delay in deposit of employees contribution towards PF and ESI by the assessee and as the same has not been deposited within the stipulated time frame as prescribed by the relevant statue, the same has been rightly disallowed in terms of section 36(1)(va) while processing the return of income u/s 143(1) and has been rightly confirmed by the ld CIT(A) following the decision of the Hon ble Madras, Gujarat and Kerala High Courts. The ld DR has thus relied on the findings of the lower authorities. 12. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Finance Act, 1987 made effective from 01/04/1988, the words numbered as clause (a), (c), (d), (e) and (f), are omitted from the above proviso and, further more second proviso was removed by Finance Act, 2003 therefore, the deduction towards the employer's contribution, if paid, prior to due date of filing of return can be claimed by the assessee. In our view, the explanation appended to Section 36(1)(va) of the Act further envisage that the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under Section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that Sec.43B starts with a notwithstanding clause would thus override Sec.36(1) (va) and if read in isolation Sec. 43B would become obsolete. Accordingly, contention of counsel for the revenue is not tenable for the reason aforesaid that deductions out of the gross income for payment of tax at the time of submission of return under Section 139 is permissible only if the statutory liability of payment of PF or other contribution referred to in Clause (b) are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the decision of the jurisdictional Rajasthan High Court, as evident from series of decisions referred supra, as the same is binding on all the appellate authorities as well as the Assessing officer under its jurisdiction in the State of Rajasthan. 16. In light of aforesaid discussion and in the entirety of facts and circumstances of the case, the addition by way of adjustment while processing the return of income u/s 143(1) amounting to ₹ 1,61,099/- so made by the CPC towards the delayed deposit of the employees s contribution towards ESI and PF though paid well before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted as the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act in view of the binding decision of the Hon ble Rajasthan High Court. 17. Given that we have adjudicated on the merits of the case whereby we have directed to delete the addition so made, the other ground of appeal relating to adjustment while processing the return of income and issue of intimation u/s 143(1) by CPC has become academic in nature and we donot deem it necessary to adjudicate the same. In the result, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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