TaxTMI 
TaxTMI 
2023 (4) TMI 1281
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...., 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year (A.Y) 2018-19. 2. The solitary issue involved in this appeal is late payment of PF and ESIC contribution by the assessee but deposited before the due date of filing of the Income Tax Return and can it be disallowed in the intimation passed u/s. 143(1) intimation. 2.1. The brief facts of the case is that the assessee is an ex-army person and Proprietor of Security Agency Services. For the Assessment Year 2018-19, the assessee filed its Return of Income declaring total income of Rs. 43,80,110/- on 09.01.2020 by making disallowance of Rs. 36,76,118/- on account of late payment of PF and ESIC beyond the monthly due dates but the same were paid before filing of R....
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....22 wherein after considering the reasons Supreme Court judgment in the case of Checkmate Services Pvt. Ltd. 143 taxmann.com 178 (SC) it is held that it is not permissible to make the adjustment of employee contribution u/s. 143(1) intimation which is debatable matter on the date of passing of the intimation. 5. Per contra, Ld. Sr. D.R. Shri Ashish Porwal appearing for the Revenue supported the order passed by the Lower Authorities and requested to uphold the same. 6. We have given our thoughtful consideration and perused the materials available on record. We note that identical issue is recently decided against assessee by the Co-ordinate Bench of ITAT, Indore in ITA No. 171/Ind/2021 M/s Prashanti Engineering Works (P) Ltd. Vs. ADIT, ....
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....itors did not specifically mention in the audit report regarding inadmissibility of claim with respect to contributions received from the employees for various funds as referred to in section 36(1)(va) of the Act, it would be useful to reproduce section 143(1) of the Act, which reads as under: Assessment. 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely:- i) any arithmetical error in the return; (ii) an incorrect claim, if such incorrect claim is apparent from any info....
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.... of Form Number 3CD, which is specific to allowability of claim of deduction u/s 36(1)(va) of the Act, does not require the auditor to make any specific observation regarding admissibility of the amount under section 36(1)(va) of the Act. At the same time, when we observe several other parts of the tax audit report viz. serial number 21(b)- amounts inadmissible under section 40(a), serial number 21(c)-amounts inadmissible under section 40(b)/40(a)(ia) of the Act (ba), serial number 21(e)- the provision for payment of gratuity not allowable under section 40A(7), serial number 21(f)- any sum paid by the assessee as an employer not allowable under section 40A(9), serial number 21(h) amount of deduction inadmissible in terms of section 14A etc,....
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.... section 2(24)(x), thus, said clause would not absolve assessee-employer from its liability to deposit employee's contribution on or before due date as a condition for deduction. The Supreme Court observed that there is a marked difference between nature and character of assessee-employer's contribution and amounts retained by assessee from out of employee's income by way of deduction wherein one is liability to be paid by employer and second is deemed income as per section 2(24)(x) which is held in trust by assessee-employer, thus, said marked difference was to be borne while interpreting obligation of assessee-employer under section 43B of the Act. The Hon'ble Supreme held that the non obstante clause under section 43B cou....
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....r provisions of section 36(1)(va) of the Act. Again, recently Pune ITAT in the case of Cemetile Industries v. ITO [2022] 145 taxmann.com 209 (Pune-Trib.) held that where assessee-employer deposited amount of employees contribution towards employees' provident fund and employees' state insurance corporation beyond due date stipulated in respective Acts, disallowance made under section 36(1)(va) was justified. The ITAT further held that adjustment under section 143(1)(a) by means of disallowance made for late deposit of employees' share to relevant funds beyond date prescribed under respective Acts was proper. 6.4 In view of the above observations respectfully following the decision of the Honourable Supreme Court in the ....