TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 713
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.... cause as no postal services, offices and transport were allowed to operate by the Government and even the Courts have held that the period of lockdown may be excluded for determining the limitation period and the delay in filing the appeal may be condoned and the appeal be heard on merits. The ld DR was heard who didn't raise any specific objection. 3. After hearing both the parties and considering the facts of the case and affidavit of the assessee placed on record which has not been disputed by the Revenue, we find that the assessee was prevented by sufficient cause in filing the appeal within stipulated time period due to lockdown on account of Covid pandemic and in exercise of powers under section 253(5) of the Act, we hereby condone the said delay of 24 days in filing the present appeal and the appeal is hereby admitted for adjudication. 4. In ITA No. 41/JP/2021 for A.Y 2018-19, the assessee has taken the following grounds of appeal:- "1. That the order passed by ld. CIT(A) is bad in law as he failed to appreciate that disallowance under section 36(1)(va) is highly debatable issue and hence such adjustment is not permissible while processing the return under section 143(1....
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....form of audit report viz. form 3CD details of contributions received from the employees for welfare funds and their deposit into respective funds are required to be mentioned by the auditor wherein the contributions deposited lately than prescribed dates under respective statute have been highlighted. The said audit reports were submitted to CPC prior to furnishing of return. While processing the returns, the CPC sent a communication to the assessee that the amounts deposited lately than prescribed under respective statute are liable to be disallowed in terms of section 36(1)(va) of the Income Tax Act, 1961. A reply was submitted drawing attention of CPC that such contributions deposited prior to due date of filing ITR are to be allowed in view of binding judgment of the Hon'ble Jurisdictional High Court of Rajasthan in the case of CIT v/s SBBJ 363 ITR 70. However not convinced with the same, the CPC disallowed such contributions and added the same in the returned income for both the years. The assessee filed first appeal before the Ld. CIT (A) drawing his attention towards the aforesaid judgment of the Hon'ble Rajasthan High Court. However, the ld CIT(A) has sustained the above a....
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....ble and therefore the action of the CPC is illegal and unjustified and deserves to be quashed. 11. It was submitted that proceedings u/s 143(1)(a) are akin to proceedings u/s 154 of the Income Tax Act, 1961. This fact is verifiable from circular no. 581 dated 28.09.1990 issued by CBDT wherein it was stated that disallowance of deductions claimed u/s 43B of the Income Tax Act, 1961 while processing the return in view of non submission of proof of payment were not amenable for rectification u/s 154 and it was held that subsequent furnishing of proof of payment prior to date of furnishing ITR could not have rectified the action taken u/s 143(1)(a). However immediately a clarification was issued by the Board wherein the above version was reversed and it was stated that if the assessee furnishes proof of payment subsequent to order u/s 143(1)(a), action u/s 154 can be taken. This shows that CBDT also considers the proceedings u/s 154 and u/s 143(1)(a) as one and same thing. It was submitted that the rectification proceedings u/s 154 cannot be taken in debatable issues as held by a large number of judicial rulings. Since the matter of allowance of employees contribution to welfare fund....
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....his issue in favour of the assessee and relevant findings reads as under: "In the light of the above said discussion, Judgments of SC and HCs, we hold that NFAC is bound by the binding decision of the jurisdictional Allahabad High Court, as the assessing officer is situated within the territorial and subjective jurisdiction of High Court. Hence, we allow the appeal of the assessee by respectfully following the decision of jurisdictional High Court in the matter of Sagun Foundry P Ltd. v/s CIT (2017) (78 Taxmann 47)." 14. It was submitted that in the instant case, the ld. CIT (A) was bound to follow the binding judgment of the Hon'ble Rajasthan High Court and was supposed to allow the appeal of the assessee. On this issue, the assessee relies on judicial pronouncements of the Hon'ble Rajasthan High Court in case of CIT vs. SBBJ 363 ITR 70, CIT vs. Rajasthan State Beverages Corp. Ltd. 393 ITR 421 and PCIT vs. Rajasthan Renewable Energy Crop. Ltd. (DBIT Appeal No. 49/2019 dated 06.08.2019) wherein it has been held that contribution received from employees for welfare funds as per section 36(1)(va) is allowable as deduction if the assessee has deposited the sum so collected before d....
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....nsidering the various decisions of the Hon'ble Supreme Court and various other High Courts has decided the matter in favour of the assessee. In the said decision, the Hon'ble High Court was pleased to held as under: "20. On perusal of Sec.36(1)(va) and Sec.43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in the case of Allied Motors (P) Ltd. (supra). 21. A conjoint reading of the proviso to Section 43-B which ....
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....Jaipur Vidyut Vitran Nigam Ltd. 363 ITR 307, CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 366 ITR 163, CIT vs Rajasthan State Beverages Corportation Limited (supra) and PCIT vs Rajasthan Renewable Energy Corporation Ltd. In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act. 19. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon'ble Rajasthan High Court and various other High Courts including Hon'ble Delhi High Court in case of CIT vs AIMIL Ltd 321 ITR 508 which were brought to his notice by the ld AR during the course of appellate proceedings but has decided to follow the decision of the Hon'ble Gujarat High Court in case of State Road Transport Corporation (supra). Given the divergent view taken by the Hon'ble Gujarat High Court as against consistent view of other High Courts including the Hon'ble Rajasthan High Court and the fact that the jurisdiction over the Assessing officer in the instant case lie....