TMI Blog2023 (3) TMI 1366X X X X Extracts X X X X X X X X Extracts X X X X ..... of Checkmate Services Pvt. Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] any claim for deduction under section 36(1)(va) of the Act wherein the assessee fails to credit the sums received from the employees to which the provisions under section 2(24)(x) of the Act are applicable, preferred by the assessee would be patently an incorrect claim and the adjustment in that respect at the stage of 143(1) of the Act process is perfectly justified. There is nothing illegality or irregularity in making the disallowance u/s 36(1)(va) in the order passed under section 143(1) and, therefore, CIT(A) rightly upheld the same. Decided against assessee. - ITA No. 129/Hyd/2023 - - - Dated:- 21-3-2023 - SHRI LALIET KUMAR, JUDICIAL MEMBER For the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amount under section 36(1)(va) of the Act of Rs. 8,63,537/- and processed the return under section 143(1) of the Act by raising a demand of Rs. 2,58,058/-. The amount relating to the employees contribution to provident fund and ESI was paid in the same financial year or before the due date of filing the return of income. Aggrieved, the assessee has filed this appeal before the learned CIT(A) against the disallowance of employees contribution to PF/ESIC of Rs. 8,63,537/- in terms of Section 43B read with section 36(1)(va) of the Act. 3. Learned CIT(A) after considering the facts of the case, relying on the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd., Vs. CIT, [2022] 143 taxmann.com 178 (SC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve heard the rival submissions. In the case of M/s. PR Packaging Service (supra), the Bench while referring the provisions under section 143(1)(a)(iv) of the Act, in the light of the view taken by the Tribunal in the case of Kalpesh Synthetics Pvt Ltd vs DCIT reported in 195 ITD 142 (Mum), was of the opinion that the said clause (iv) would come into operation when the Tax Auditor had suggested for a disallowance of expense or increase in income, but the same had not been carried out by the assessee while filing the return of income; and that if the tax auditor had not stated to disallow Employees Contribution to Provident Fund wherever it is remitted beyond the due date under the respective Act, the action of the CPC in disallowing the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m deduction of the same under section 36(1)(va) of the Act by complying with the said provision. Explanation-1 added by amendment by way of Finance Act, 2021 with effect from 01/04/2021 explains the term due date and it does not impact any rights, liabilities and disabilities created by the provision. Such provisions which will only explain certain terms of the existing provision do not create any new rights or liabilities but only the rights and liabilities that were created by the provisions stood explain by the explanation, and, therefore, such explanations will take effect from the date of the provision itself. 9. In Checkmate Services Pvt. Ltd., (supra), the Hon'ble Apex Court dealt with the impact of the provisions under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees contributions- which are deducted from their income. They are not part of the assessee employer s income, nor are they heads of deduction per se in the form of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence could be made to the relevant portions of section 143 of the Act which read thus,- 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely: (a) the total income or loss shall be computed after making the following adjustments, namely: (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; 12. The above provisions indicate that while processing the return of income that was filed under section 139 or s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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