TaxTMI 
TaxTMI 
2022 (4) TMI 105
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....on of Rs. 63,904/-, thereby computed the total income at Rs. 42,55,790 /-. 3. Aggrieved by the intimation u/s 143(1) of the Act, the assessee filed an appeal before the CIT(A) which was migrated to the NFAC in terms of notification No.76/2020 in S.O.No. 3296(E), dated 25/09/2020 from CBDT. Before the Ld.CIT(A), the assessee reiterated that disallowance of employees share of contribution of PF and ESI made on account of late payment, even though the same were paid before the end of the previous year in most of the instances and in any case all were paid before the due date of filing the return of income. The Ld.CIT(A) after considering the submissions of the assessee relied on the amendment made to section 43B as well as section 36(1)(va) by insertion of explanations to those sections by the Finance Act, 2021. However, the Ld.CIT(A) dismissed the appeal filed by the assessee. 4. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before the Tribunal and the Ld.AR relied on the following grounds of appeal :- 1. In the facts and circumstances of appellant's case, the Learned Commissioner of Income-Tax (Appeals) should have accepted that, the very disa....
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....f income. 6. We have heard both the parties and perused the material placed on record. In the instant case, there is no dispute that the return was processed u/s 143(1) and there was no scrutiny assessment made u/s 143(3) of the Act. It is settled issue that no debatable issues are permitted to be made adjustments u/s 143(1) of the Act. In the instant case, what was added in the intimation u/s 143(1) was the employees contribution to PF. Hon'ble Madras High Court in the case of Redington (India) Ltd. held that employees contribution to PF and ESI is also allowable deduction, if, the same is paid before the due date for filing the return of income. This Tribunal in the case of Andhra Trade Development Corporation in I.T.A. No.434/Viz/2019 dated 05.05.2021 held that debatable issues are not permitted to be made adjustments while processing the return of income u/s 143(1) of the Act. For the sake of clarity and convenience, we extract para No.6 of the order in Andhra Trade Development Corporation which reads as under:- "We have heard both the parties, perused the material placed on record. As per the adjustments made by the CPC, Bangalore to the extent of Rs. 7,31,016/- u/....
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.... is deductible under the provisions of section 36(1)(va) of the Act, if the same is paid on or before the due date specified under the provident fund Act. The A.O. further was of the opinion that in view of the clear provisions of section 2(24)(x) r.w.s. 36(1)(va) of the Act, any recovery from employees towards provident fund contribution is deemed to be income of the assessee, if the employer not paid the same to the provident fund account of the employee within due date specified under the provisions of PF Act. It is the contention of the assessee that second proviso to section 43B of the Act provides that no deduction shall be allowed unless such sum is actually been paid on or before due date as specified in explanation to 36(1)(va) of the Act which was omitted by the Finance Act, 2003 w.e.f. 1.4.2004 and accordingly, there was no special provision regarding employees' contribution to PF. It is further contended that as per the amended provisions of section 43B of the Act, any sum payable by the assessee as an employer by way of contribution to PF shall be allowed, if the same is paid on or before the due date of filing of return of income u/s 139(1) of the Act. 6. The....
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....the Act provides for certain deductions to be allowed only on actual payment basis. Sub clause (b) of section 43B of the Act covers any sum payable by the assessee as an employer by way of contribution to any Provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees. The proviso to section provides that any sum paid by the assessee on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made under the provisions of section 43B of the Act. A careful consideration of section 43B of the Act, it is clear that an extension is granted to the assessee to make the payment of PF contributions or any other fund till the due date of furnishing return of income u/s 139(1) of the Act. Therefore, in our opinion, there is no difference between employees and employer contribution to PF and if such contribution is made on or before the due date of furnishing return of income u/s 139(1) of the Act, then deduction is to be allowed under the provisions of section 43B of the Act. 8. The Hon'ble Karnataka High Court, in the case of Essae Teraoka (P) Ltd. Vs. DCIT 366 ITR 408 took the view that th....