TaxTMI 
TaxTMI 
2022 (9) TMI 300
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....in true spirit and judiciously. 4. That the appellant reserves his right to add, amend, alter or withdraw any ground of appeal on or before hearing of this appeal. None has appeared on behalf of the assessee, however, the ld. Counsel for the assessee vide his letter dated Nil submitted written submission and requested that the appeal may be decided on the basis of written submission. Therefore, we proceed to decide the appeal on the basis of written submission and after hearing the ld. D/R. 2. The main ground of the assessee relates to challenging the confirmation of addition in respect of employees contribution towards EPF/ESI pertaining to assessment year 2019-20. 3. Briefly the facts of the case are that the assessee filed its return of income along with Tax Audit Report in Form 3CB-3CD on 16.10.2019 under section 139(1) of the I.T. Act, 1961. While completing the assessment under section 143(1) of the Income Tax Act, 1961, the DCIT CPC vide order/intimation dated 10.04.2020 made addition to the tune of Rs. 2,19,330/- to the returned income on account delayed payment of Employees Share of Provident Fund and Employees State Fund. However, the impugned payment was however mad....
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....ted that the adjustment is beyond the scope of Section 143(1) of the Act. It was accordingly submitted that the adjustment so made by the CPC and confirmed by the ld. CIT(A) NFAC may be directed to be deleted. 5. On the other hand, the ld. DR submitted that as per details furnished in the tax audit report, the payment of employee's contribution of ESI/PF amounting to Rs. 2,19,330/- was not made within the prescribed due date U/s 36(1)(va) of the Act and since these amount were not disallowed in the return of income filed by the assessee, the variance between the tax audit report and ITR has been duly flagged by the CPC in the computerized processing and disallowance U/s 143(1)(a)(iv) on the basis of fact furnished by the assessee was made which clearly fails within ambit of prima facie adjustment to be carried out U/s 143(1)(a)(iv) of the Act. Further, reliance was placed on the amendment brought in by the Finance Act, 2021 wherein the explanation to Section 36(1)(va) has been introduced. It was submitted from the said amendment, it is evident that the law is and has always very clear i.e. employee's contribution to specified fund will not be allowed as deduction U/s 36(1)(va) if ....
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....upra) and subsequent decisions. 15. In this regard, we may refer to the initial decision of Hon'ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur wherein the Hon'ble High Court after extensively examining the matter and considering 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/dedu....
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....r the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under Section 36(1)(va) of the IT Act." 16. The said decision has subsequently been followed in CIT vs. Jaipur Vidyut Vitran Nigam Ltd. (supra), CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (supra), and CIT vs Rajasthan State Beverages Corportation Limited (supra). 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. 17. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon'ble Rajasthan High Court but has decided to follow the decisions rendered by the Hon'ble Delhi, Madras, Gujarat and Kerala High Courts. Given the divergent views taken by the various High Courts and in the instant case, the fact that the jurisdiction over the Assessing officer lies with the Hon'ble Rajasthan High Court, in our considered view, the ld CIT(A) ought to have considered and followe....