Tribunal overturns tax additions, citing double disallowances, emphasizes return filing date over payment due date.

The Tribunal allowed the appeal of the assessee, deleting the additions made under Sections 43B, 40, and 36(1)(va) of the Income Tax Act, finding that the Assessing Officer's additions resulted in double disallowances. The Tribunal held that the disallowance under Section 36(1)(va) should be deleted, considering the due date for filing the return of income, not the payment due date. The judgment was pronounced in open court.

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Issues Involved:
1. Disallowance under Section 43B of the Income Tax Act.
2. Disallowance under Section 40 of the Income Tax Act.
3. Disallowance under Section 36(1)(va) of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Disallowance under Section 43B of the Income Tax Act:
The assessee, a Private Limited company, filed a return declaring a total income of Rs. 8,20,52,190. The Assessing Officer (AO) made an addition of Rs. 1,20,58,223 under Section 43B, which the assessee contended was already disallowed under Section 40 in the computation of income. The assessee argued that this amounted to a double disallowance. The Tribunal found that the assessee had indeed disallowed the provision for leave encashment of Rs. 1,20,58,223 in its computation of total income. The Tribunal concluded that the addition made by the AO under Section 43B resulted in a double addition and should be deleted.

2. Disallowance under Section 40 of the Income Tax Act:
The AO also made an addition of Rs. 1,30,500 under Section 40, which the assessee claimed was already disallowed in the computation of total income. The Tribunal verified that the assessee had disallowed this amount under Section 40 in its computation. Consequently, the Tribunal determined that the addition made by the AO under Section 40 also resulted in a double addition and should be deleted.

3. Disallowance under Section 36(1)(va) of the Income Tax Act:
The AO disallowed Rs. 18,90,162 due to the delayed deposit of employees' contributions to the Provident Fund beyond the due date specified under the Provident Fund Act. The assessee argued that the "due date" should be considered as the due date for filing the return of income under Section 139(1) of the Act, not the due date for payment. The Tribunal referred to the decision of the Karnataka High Court in the case of Sabari Enterprises, which held that the deduction is permissible if the payment is made before the due date for filing the return of income under Section 139(1). The Tribunal also noted that the amendment to Section 36(1)(va) and Section 43B by the Finance Act, 2021, is applicable prospectively from 01.04.2021, and not retrospectively. Therefore, the Tribunal concluded that the disallowance under Section 36(1)(va) should be deleted.

Conclusion:
The Tribunal allowed the appeal of the assessee, deleting the additions made under Sections 43B, 40, and 36(1)(va) of the Income Tax Act. The judgment was pronounced in the open court.

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