Section 143(1) adjustment on provident fund delay cannot rest only on audit report where payment was made before return due date.

An adjustment under section 143(1) based solely on the tax audit report for employees' provident fund contributions paid after the fund due date but before the return due date was treated as unsustainable, because a tax audit report cannot override binding jurisdictional precedent and a reasoned response to objections is required in quasi-judicial processing. The later explanations to sections 36(1)(va) and 43B by the Finance Bill, 2021 were said not to change the position for the year under appeal. The document also notes an inconsistent final conclusion stating that the intimation disallowance remained undisturbed.

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Issues: Whether an adjustment under section 143(1) could be sustained on the basis of the tax audit report to disallow employees' provident fund contributions paid after the relevant fund due date but before the due date under section 139(1), and whether the amendments to sections 36(1)(va) and 43B by the Finance Bill, 2021 affected the position for the year under appeal.

Analysis: The Tribunal held that the present scheme of section 143(1) is materially broader than the earlier regime of prima facie adjustments, but it still requires the Assessing Officer to consider the assessee's response and to dispose of objections by a reasoned order. A standard template rejection without specific reasons was held insufficient for a quasi-judicial determination. The Tribunal further held that a tax audit report is only an independent professional's report and cannot override the binding law laid down by the jurisdictional High Court. Where the audit report records factual delay but the governing legal position treats payment before the due date under section 139(1) as deductible, the report cannot by itself justify a disallowance under section 143(1)(a)(iv). The Tribunal also accepted that the later explanations to sections 36(1)(va) and 43B did not assist the Revenue in the facts of the case.

Conclusion: The adjustment was not sustainable and the assessee succeeded on the issue.

Final Conclusion: The appeal failed and the intimation disallowance was left undisturbed in consequence of the binding legal position favouring the assessee.

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