TMI Blog2023 (3) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution which were deducted from their income and was not part of assessee-employer's income, thus, said clause would not absolve assessee-employer from its liability to deposit employee's contribution on or before due date as a condition for deduction. As recently Pune ITAT in the case of Cemetile Industries [ 2022 (12) TMI 354 - ITAT PUNE] held that where assessee-employer deposited amount of employees contribution towards employees' provident fund and employees' state insurance corporation beyond due date stipulated in respective Acts, disallowance made under section 36(1)(va) was justified. ITAT further held that adjustment under section 143(1)(a) by means of disallowance made for late deposit of employees' share to relevant funds beyond date prescribed under respective Acts was proper. Respectfully following the decision of Checkmate Services Private Ltd [ 2022 (10) TMI 617 - SUPREME COURT] and Harrisons Malayalam Ltd [ 2023 (1) TMI 137 - SC ORDER] and in the light of our observations, we hereby dismiss the assessee s appeal. - ITA No. 171/Ind/2021 - - - Dated:- 22-2-2023 - Shri Siddhartha Nautiyal, Judicial Meber And Shri B.M. Biyani, Accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The brief facts of the case are that the assessee is a private limited company. The income tax return was electronically filed on 25-10-2019, showing total income of ₹ 11,86,250/-. Thereafter, CPC Bangalore processed the return and an intimation under section 143(1) of the Act was passed on 18-04-2020. The income was assessed at ₹ 14,13,310/- in the said intimation by making disallowance of claim of ₹ 2,27,067/- in respect of employee s contribution towards provident fund and ESIC which was paid beyond the period prescribed. 4. In appeal, Ld. CIT(Appeals) dismissed assessee s appeal holding that the Finance Act 2021 has clarified this aspect related to the operation of the section. The Ld. CIT(Appeals) made the following observations while dismissing the assessee s appeal: 6.9 In view of the above discussions and also keeping in view of the clarificatory amendments brought in by the Finance Act, 2021 vide (a) Explanation 2 in section 36(1 )(va) (b) Explanation 5 in section 43B Keeping in view of the above clarificatory explanations and following the ratio of the above decisions, the order of the Assessing Officer is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69[section 10AA or under any of the provisions 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: A perusal of section 143(1) of the Act shows that the words used are (iv) disallowance of expenditure indicated in the audit report 6.1 Therefore, there is no specific requirement under section 143(1) of the Act that the auditor has to make a specific observation regarding admissibility/inadmissibility with regard to any claim of expenditure and all that is required under section 143(1) of the Act is that disallowance of such expenditure should be indicated in the audit report . Now, on going through the specific clauses of the Tax Auditors Report in Form Number 3CD issued under section 44AB of the Act, we observe that serial number 20(b) of Form Number 3CD, which is specific to allowability of claim of deduction u/s 36(1)(va) of the Act, does not require the auditor to make any specific observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tained by assessee from out of employee's income by way of deduction wherein one is liability to be paid by employer and second is deemed income as per section 2(24)(x) which is held in trust by assessee-employer, thus, said marked difference was to be borne while interpreting obligation of assesseeemployer under section 43B of the Act. The Hon'ble Supreme held that the non obstante clause under section 43B could not apply in case of amounts which were held in trust as was case of employee's contribution which were deducted from their income and was not part of assessee-employer's income, thus, said clause would not absolve assessee-employer from its liability to deposit employee's contribution on or before due date as a condition for deduction. Again the Supreme Court in the case of Harrisons Malayalam Ltd. [2022] 145 taxmann.com 608 (SC), dismissed the SLP of the Assessee against order of High Court that where assessee-company failed to pay employees contribution towards EPF and ESI within due date prescribed in respective Acts, deduction under section 36(1)(va) was not allowable. Recently in the case of Ms. Nalina Dyave Gowda [2023] 146 taxmann.com 420 (Bang ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
