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TMI Blog2021 (12) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn, u/s 143(1) of the Income Tax Act amounting Rs. 1,14,148/- for delay in deposit of Employees contribution to PF and ESI on due date of the respective Act which is unjustified and unlawful as it was deposited before the due date of filing IT Return U/s 139(1) of the Income Tax Act, 1961. This was also allowed by Hon'ble ITAT, Jaipur and Hon'ble High Court of Rajasthan, Hon'ble ITAT of Hyderabad, Hon'ble High Court of Karnataka, Hon'ble High Court of Madras and Hon'ble High Court of Uttrakhand." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. Briefly the facts of the case are that the assessee filed its return of income on 27.09.2019 declaring total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation added to Section 36(1)(va) of the Act by the Finance Act, 2021 will take effect from 1st April, 2021 and will apply from the assessment year 2021-22 and subsequent assessment years and not to the impugned assessment year. It was further submitted that the adjustment is beyond the scope of Section 143(1) of the Act. It was accordingly submitted that the adjustment so made by the CPC and confirmed by the ld. CIT(A) NFAC may be directed to be deleted. 5. Per contra, the ld. DR submitted that as per details furnished in the tax audit report, the payment of employee's contribution of PF/ESI amounting to Rs. 1,14,148/- was not made within the prescribed due date U/s 36(1)(va) of the Act and since these amount were not disallowed in the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance made U/s 143(1) of the Act by CPC on account of assessee's failure to pay the employees' contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) is strictly in accordance with law and clearly comes under the prima facie adjustments as envisaged U/s 143(1)(a)(iv) of the Act. 6. We have heard the rival contentions and perused the material available on record. In case of K.P. Airtech vs. DCIT (in ITA No. 41 &42/JP/2021 dated 16.08.2021, the Coordinate Bench had extensively dealt with the identical matter relating to employee's contribution towards ESI/PF and our findings therein read as under: "16. We have heard the rival contentions and perused the material available on record. On perusal of the audit rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in the case of Allied Motors (P) Ltd. (supra). 21. A conjoint reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposited by the assessees though substantial benefits had been obtained by them in the shape of the amount having been claimed as a deduction but the said amounts were not deposited. It is pertinent to note that the respective Act such as PF etc. also provides that the amounts can be paid later on subject to payment of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. 23. Thus, we are of the view that where the PF and/or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the jurisdictional Rajasthan High Court, as evident from series of decisions referred supra, in the present case as the same is binding on all the appellate authorities as well as the Assessing officer under its jurisdiction in the State of Rajasthan. 20. 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 Rs. 1,25,431/- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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