TMI Blog2023 (4) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... able deduction in computing taxable income of business and the revenue-authorities have rightly disallowed the same. Therefore, we uphold the action of lower-authorities in making/confirming the impugned disallowance. Decided against assessee. - Shri T.R. Senthil Kumar, Judicial Member And Shri B.M. Biyani, Accountant Member For the Assessee : Ms. Shradha Piplodia, Adv. For the Revenue : Shri Ashish Porwal, Sr. DR ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the order dated 11.07.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as NFAC ), arising out of the Intimation passed under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of payment of PF ESIC beyond the due date as per section 36(1)(va). 3. The Ld. CIT(A), NFAC erred in not appreciating that the addition could not have been made u/s 143(l)(a) in any case, as the issue was debatable. 4.1. Ld. Counsel Ms. Shradha Piplodia appearing for the assessee filed before us a small Paper Book containing the original Return of Income filed by the assessee along with the Tax Audit Report an intimation made by CPC and thus submitted the tax auditor has not suggested for any disallowance. However the Ld. CPC made the disallowance and demanded the tax which is against the provisions of law. The Ld. Counsel relied upon the Co-ordinate Bench Decision in the case of P.R. packaging Service in ITA No. 237 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and due dates of remittance. Accordingly, in view of the Mumbai ITAT decisions in the case of PR Packaging in ITA number 2376/Mum/2022 and Kalpesh Synthetics 137 Taxmann.com 475 (Mumbai), this claim of deduction u/s 36(1)(va) of the Act cannot be disallowed u/s 143(1) of the Act (more specifically under sub-clause (d) to 143(1) of the Act). Secondly, the counsel argued that the issue at the time when the disallowance was made, issue was debatable and accordingly could not be the subject matter of disallowance under section 143(1) of the Act. In response, DR relied upon the observations made by the Ld. CIT(Appeals) in the appellate order. 6. We have heard the rival contentions and perused the material on record. Regarding the argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3(1) of the Act. 6.3 With regards to the second argument of the counsel for the assessee that at the time when the disallowance was made, the issue was debatable, we observe that the position on this issue has now been unambiguously clarified by the Hon'ble Supreme Court with respect to all assessment years prior to AY 2021-22 in the case of Checkmate Services (P.) Ltd. [2022] 143 taxmann.com 178 (SC) wherein the Supreme Court held that for assessment years prior to AY 2021-22, 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 held in trust by assessee-employer as per section 2(24)(x), thus, said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lore - Trib.) the assessee during, financial year 2018-19 (assessment year 2019-20) made payment of employees' contribution to ESI and PF beyond due date specified under relevant Act and claimed deduction of same under section 36(1)(va). The Assessing Officer made disallowance of employees' contribution to ESI and PF while electronically processing return of income under section 143(1)(a) of the Act. The ITAT held that disallowance under section 143(1)(a) was valid in view of Supreme Court's decision in case of Checkmate Services (P.) Ltd. v. CIT [2022] 143 taxmann.com 178 and the assessee will not be entitled to deduction of belated payment of ESI and PF of employees' share of contribution as per provisions of section 36(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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