TaxTMI 
TaxTMI 
2018 (10) TMI 1175
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....s. 263 of the Act for the following reasons: i) Section 43B being the main section for deduction of Contribution payable by the employer, whether it is the employee contribution or employer contribution, no distinction should be made as far as section 43B is concerned. ii. After the amendment of section 43B vide Finance Act, 2003, deduction should be allowed for contribution whether it is employer's or employee's contribution if the same is paid before the due date for filing the return under section 139. iii. Language used in section 43B contains the word "as employer", never give meaning that it is only limited to the Employer Contribution. As an employer assessee is required to pay both the Employee'....
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....ncome of Rs. 16,64,260/-/ The assessment order was passed on 19/12/2016, determining the total income at Rs. 20,64,260/- by disallowing a sum of Rs. 4,00,000/- from the claim of travelling expenses. 4. On examination of the records, the CIT(A) found that the Assessing Officer had not examined the following issues: (a) The assessee has collected employees' share of EPF and ESI, but the payment towards the fund has not been made within the period prescribed for the purpose by Government of India. (b) Employees' contribution towards ESI Corporation for an amount of Rs. 1,86,423/- and Employees' contribution to Provident Fund Scheme amounting to Rs. 9,00,593/- being unpaid before the due date towards ESI Corporation....
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.... Limited" come under the same tax bracket, ie, 30.9%, which is the maximum tax rate for a corporate assessee. Hence from the department point of view it is a revenue neutral exercise. Relying on various case decisions of the Courts and Tribunals, the Ld. AR submitted that for reopening the assessment u/s.263, "assessment order is not only erroneous but is also prejudicial to the interest of Revenue". The Ld. AR relied on the judgment of the Supreme Court in the case of Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 wherein it was categorically explained that fulfilment of both the conditions is an essential prerequisite for reopening of assessment u/s.263." 5. After hearing the assessee's Counsel, the CIT(A) found that the assesse....
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.... & EPF amounting to Rs. 1,86,423/- and Rs. 9,00,593/- respectively , the CIT directed the Assessing Officer to examine the same with supporting evidences and disallow the belated deposit of employees' contribution to Provident Fund or Employees State Insurance which is not deductible while computing taxable income of the assessee even though the payment was made before the due date of filing of returns under the Income Tax Act, 1961. The assessing Officer is also directed to refer the case to TPO u/s.92CA(1) of the IT Act for verification of all the Specified Domestic Transactions of the assessee with its sister concerns M/s.Hykon Power Electronic and M/s. Hykon Solar Energy during the F Y 2013- 14. Therefore, the CIT set aside the asse....
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....red to act fairly while accepting or rejecting the claim of the assessee in cases of scrutiny assessments. The Assessing Officer should protect the interests of the revenue and to see that no one dodged the revenue and escaped without paying the legitimate tax. The Assessing Officer is not expected to put blinkers on his eyes and mechanically accept what the assessee claims before him. It is his duty to ascertain the truth of the facts stated and the genuineness of the claims made in the return. The order passed by the Assessing Officer becomes erroneous when an enquiry has not been made before accepting the genuineness of the claim which resulted in loss of revenue. 6.1 In the present case, we find that the issue relating to employees' ....
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.... and ESIC within the dates prescribed under the respective Acts, the assessee was not entitled to deduction under section 43B of the amounts deducted thereunder for an on behalf of the employees. This judgment was delivered on 8th September, 2015. The assessment order was passed on 19/12/2016. At the time of passing of the assessment order, the judgment was available to the Assessing Officer and he should have considered the same and disallowed the employee's contribution towards ESIC and EPF after the prescribed date under the respective Act. The Assessing Officer failed to take note of the judgment of the Jurisdictional High court cited supra. In view of the above judgment, the assessment order is erroneous in so far as it is prejudicial ....