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TMI Blog2021 (12) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... e liable to be quashed. 3. The learned Commissioner of income-tax (Appeals), National Faceless Appeal Centre should have, by following the principles laid down for binding precedence allowed the appeal. On the contrary, the dismissal of appeal despite binding judicial precedence makes the impugned order bad in law and liable to be quashed. 4. In any case and without prejudice, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has erred in confirming the adjustment u/s. 143(1)(a) as done by CPC. The adjustment done by CPC in the intimation being beyond the purview of section 143(i)(a) and the adjustment being not prima facie adjustment should have been deleted by the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre. Instead, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has erred in holding the adjustment to be in order. 5. In any case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has erred in; a) holding that the employee's contribution for ESI are allowable as deduction only when deposited by the employer within the due dates prescribed under re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of filing the return of income u/s 139(1) of the Act for the year under consideration. As such, the said amount cannot be disallowed u/s 36(1)(va) of the Act and it is not hit by explanation 2 to sec.36(1)(va) of the Act which calls for payment within the due date prescribed under the relevant Act. For this purpose he relied on the judgment in the case of Essac Teraoka (P.) Ltd. v. Dy. CIT 366 ITR 408 (Kar.), wherein it has held as under: "15. From bare perusal of this provision, it is clear that under the provision, for IT Act, an extension is given to the employer to make payment of contribution to provident fund or any other fund till the "due date" applicable for furnishing the return of income under sub-section(1) of section 139 of the IT Act in respect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with such return. In short, this provision states, notwithstanding anything contained in any other provision contained in this Act, a deduction otherwise allowable in this Act in respect of any sum payable by the assessee as an employer by way of contribution to any fund such as providen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent fund or the fund under the ESI Act within fifteen days of the closure of every month pay. It is clear that the word "'contribution" used in Clause(b) of Section 43B of the IT Act beans the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under subsection(1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 21. The submission of Mr. Aravind, learned counsel for the revenue that if the employer fails to deduct the employees contribution on or before the due date, contemplated under the provisions of the PF Act and the PF Scheme, that would have to be treated as income within the meaning of Section 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. We agree with the view taken by this Court in W.A.No.407712013. 23. In the result, the appeal is allowed and the substantial question of law framed by us is answered in favour of the appellant-assessee and agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid within the due date under the respective statutory enactments by the assessees as contended by learned counsel for the Revenue is not tenable in law and therefore the same cannot be accepted by us." 11. The ld.AR drew our attention to the deletion of the second proviso to section 43B of the Income-tax Act by the Finance Act 2003, which provision has come into force, with effect from April 1, 2004. The reliance placed upon the decision of the apex court in Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677 and also on the decision in General Finance Co. v. CIT (Asst.) [2002] 257 ITR 338 (SC) in respect of applicability of section 43B(b) and also omission of clause (a) or (c) or (d ) or (e) or (B referred to above occurred in the first proviso to section 43B, supports the case of the assessees and also relevant paragraphs extracted from Allied Motor's case [1997] 224 ITR 677 and paragraph 59 referred to supra in this judgment from the Finance Bill with all fours supports the case of the assessee/ respondents. Therefore, we have to answer the substantial question of law No. 1 framed by this court in these appeals at the instance of the Revenue against them, viz., in the negativ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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