TaxTMI 
TaxTMI 
2023 (3) TMI 1366
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.... For the assessment year 2018-19, the assessee has filed an original return of income on 31/10/2018 declaring total income of Rs. 14,92,290/- under the normal provisions of the of the Income Tax Act, 1961 (for short "the Act"). The assessee had received the adjustment notice under section 143(1)(a)(iv) of the Act from the learned Assessing Officer, proposing addition of Rs. 8,63,537/- of the amount received from employees as contribution to the provident fund/super annuation fund/fund set up under ESI Act not credited to the employees account on or before the due date as per section 36(1)(va) of the Act. In this regard, the assessee has furnished response online to the proposed adjustment referring to the judgments passed by the Hon'ble....
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....hed by the learned CIT(A) that the assessee is not entitled to claim the deduction in respect of the delayed remittance of the employees' contribution of PF and ESI, he placed reliance on the decision reported in Checkmate Services Pvt. Ltd., Vs. CIT, [2022] 143 taxmann.com 178 (SC). He, however, fairly brought it to the notice of the Bench that subsequently there are two decisions rendered by different Co-ordinate Benches of this Tribunal in the case of M/s. PR Packaging Service Vs. ACIT in ITA No.2376/Mum/2022 (AY.2019-20) and M/s. Electrical India Vs. ADIT, CPC in ITA No.789/Chny/2022, (AY.2019-20) wherein contrary views are taken in case where the disallowance under section 36(iv)(a) was made while processing the return under section 14....
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....ived from the employees towards PF and ESI contribution within the date by which the assessee was required to deposit the same is in direct conflict with the claim made by the assessee seeking deduction under section 36(1)(va) of the Act and, therefore, falls within the ambit of section 143(1)(a)(ii) of the Act and, therefore, any addition made on account of disallowance by invoking the provisions under section 36(1)(va) of the Act cannot be interfered with. 8. Under section 2(24)(x) of the Act, the 'income' includes any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees State Insurance Act, 1948 (34 of 1948) or any other fun....
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....by Explanation to Section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts - the employer's liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the employees' income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation of every assessee under Section 43B. 54. In the opinion of this Court, the reasoning in the impugned judgment that the non-obstante clause would not in any manner dilute or override the employer's obligation to deposit the amount....
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....ounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under Section 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction. 10. This decision of the Hon'ble Apex Court declaring the law under the provision under section 36(1)(va) of the Act will take the retrospective effect, if not otherwise stated to be so specifically. In the decision, nothing contrary is indicated for any prospective effect only. It is, therefore clear that the law under section 36(1)(va) of the Act in the light of the Explanation-1 as declared by the Hon'ble Apex Court i....