TaxTMI 
TaxTMI 
2024 (7) TMI 1136
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....s. 5,87,43,293/- was made by the CPC on account of delay in deposit of employees' contribution to PF & ESI as mentioned in the tax audit report filed by the assessee. 3. The assessee had preferred an appeal before the First Appellate Authority against this adjustment which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed. 4. Now, the assessee is in appeal before us. 5. The assessee had taken following grounds in this appeal: "1. That on the facts, and in the circumstances of the case and in law, it is chanted that Intimation issued u's. 143(1) was dated 31/03/2021 here in after referred as intimation, digitally signed by the ADIT.CPC Banagalore (here in after referred as AOI on 01/04/2021 and Email was send on 01/04/2021 thus date of issuance of the intimation was 01/04/2001, accordingly the intimation was issued beyond the statutory time period specified in Proviso 5 to section 143(1) thus the intimation was time barred deserves to be declared as invalid, void ab-initio and bad in law. 2. That on the facts, and in the circumstances of the case and in law, it is objected that the Intimation dated 31/03....
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....d in the circumstances of the case and in law, the CIT(A) erred in sustaining the addition of Rs. 5,87,43,291/made u/s 36(1)(va) in the intimation without appreciating the fact that employees contribution to PF and ESI are treated as 'Deemed Income' u/s. 2(24)(x) in the books of accounts and not being deposited within the due dates specified under the relevant acts as given in Explanation-1 to section 36(1)(va) deduction u/s 36(1)(va) was not claimed thus on its subsequent accounting in the books of account including deposit with additional liability of interest and penalty as specified under the relevant Acts such expenditure changes its colour and is allowable in the hands of the assessee employer under the following heads: (1). As normal business expenditure under section 37 of the LT Act, 1961; (ii). As business expenditure incurred on account of 'Business and Commercial Expediency" eligible for deduction under section 37 of the 1.T Act, 1961. Assessee-Appellant prays before the Hon'ble Tribunal to held the expenditure incurred by the Assessee-Employer on depositing the employees contribution due to 'business and commercial expedie....
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....o PF and ESI in the intimation u/s. 143(1) dated 31/03/2021 without appreciating the fact that for the return of income filed on 30/09/2019 for the A.Y.2019-20 the due date for issuing the intimation was on or before 31/03/2021 as specified in Proviso 5 to section 143(1) and in the present case the intimation was digitally signed on 01/04/2021 and was issued to the assessee by Email on 01/04/2021, accordingly the Intimation was issued beyond the time period and barred by limitation, thus deserves to be held as invalid, void ab-initio and bad in law and to be annulled. 3. That without prejudice to the contention raised in the grounds of appeal no.2 above, the CIT(A) erred in confirming the adjustment of Rs. 5,87,43,293/- u/s. 36(1)(va) r.w.s 2(24)(x) on account of delayed deposit of employees contribution to PF and ESI in the intimation u/s. 143(1) dated 31/03/2021, digitally signed on 01/04/2021 without appreciating the fact that the intimation was silent regarding which type of adjustment was applied as specified u/s. 143(1)(a) clauses (1) to (vi), accordingly the mandatory procedures are not followed, thus the intimation may be held as issued without authority of law and....
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....loyees contribution to PF and EST are recovered from the employees on disbursement of salary and wages, accordingly due date for deposit of employees contribution to PF and ESI that is within 15 days of the following month has to be counted from the end of the month during which salary and wages was actually disbursed among the employees, thus assessee claims that employees contribution to PF and ESI were deposited on or before 15th of the following month in which salary and wages were actually disbursed, accordingly prays for relief of the adjustment of Rs. 5,87,43,293/- made in the intimation in full. 2. That on the facts, and in the circumstances of the case and in law, the CIT(A) erred confirming adjustment in of Rs. 5,87,43,293/- u/s. 36(1)(va) r.w.s 2(24)(x) on account of delayed deposit of employees contribution to PF and ESI made in the intimation u/s. 143(1) dated 31/03/2021, digitally signed on 01/04/2021 without appreciating the fact employees contribution to PF and ESI are treated as 'Deemed Income' u/s. 2(24)(x)' in the books of accounts on its receipt/recovery and not being deposited within the due dates specified under the relevant Acts as given ....
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....1 was not barred by limitation, even if it was communicated by email on 01.04.2021. In this connection, he has drawn our attention to the order of Hon'ble Supreme Court in case of Suo Motu Writ Petition (C) No. 3 of 2020, whereby the limitation period of all the proceedings was extended. Further, the Ld. CIT. DR has also brought to our notice the Order F. No. 225/132/2023/ITA-II dated 01.12.2023, as per which the time limit for processing of all the returns of A.Ys. 2018-19, 2019-20 & 2021-22 with a refund claim was extended by CBDT till 31.01.2024. On merits, the Ld. CITDR strongly supported the order of the Ld. CIT(A). He submitted that identical issue was involved in the assessee's own case in A.Y. 2018-19 and the adjustment on account of belated payment of PF & ESI was upheld by Ld. ITAT, Ahmedabad in ITA No. 68/Ahd/2023, dated 20.05.2024. The Ld. CIT-DR also relied upon the decision of this Tribunal in the case of Corrtech International (P.) Ltd. vs. ACIT, [2023] 152 taxmann.com 498 (Ahmedabad-Trib.). 10. On the issue of legal grounds raised by the assessee, the Ld. CIT-DR vehemently argued that these grounds should not be admitted. He submitted that Hon'ble Supreme Court h....
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....se. The Apex Court had held in the case of Checkmate Services Private Limited (supra) that there is clear distinction between employer's contribution which is its primary liability under law [in terms of section 36(1)(iv)] and its liability to deposit amounts received by it or deducted by it from its employees' [in terms of section 36(1)(va)]. The former forms part of the employers' income, and the later retains its character as an income (albeit deemed), by virtue of section 2(24)(x) and therefore, subjected to conditions spelt out by Explanation to section 36(1)(va) 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 contributions - the employer's liability is to be paid out of its income whereas the second is deemed to be 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. If the same is not deposited as per mandate of section 36(1)(va), the deduction of the ....
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....ssing the return. The adjustment on account of belated payment to PF & ESI was made on the basis of report as made by the Tax Auditor in the Tax Audit Report. The CPC had disallowed late payment of employees' contribution to various funds as referred in Section 36(1)(va) of the Act based on the defaults as reported by the Auditor. The details of these late payments was reported in Column 20(b) of the Tax Audit Report. This fact has not been disputed by the assessee. As per Explanation-1 to section 36(1)va) of the Act, the "due date" is the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant funds under any Act, Rule, order or notification issued thereunder. Only after considering this provision, the Auditor had reported the delay in deposit of employees' contribution under different funds. The Auditor had not certified any of the contentions as raised by the assessee in these grounds. Therefore, the Ground No.1 as taken by the assessee is devoid of any merit and is rejected. Further, Ground No.2 as taken by the assessee also doesn't emanate from the adjustment as made by the CPC while processing the re....
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.... the merits of the case stand dismissed. Therefore, we are inclined to agree with the submission of the Revenue that this is not a fit case where the legal grounds as raised by the assessee are relevant to consider the question of correct assessment of tax liability of the case. The only objective of the assessee behind raising these legal grounds is to obviate the correct tax liability. Nevertheless, since the issue of limitation and natural justice, while processing the return, has been raised in the legal grounds, we deem it proper to consider these grounds on merits as well. 17. The first legal ground taken by the assessee is that intimation under Section 143(1) of the Act issued by the CPC on 01.04.2021 was barred by limitation. A copy of the intimation has been brought on the record by the assessee. It is found that the intimation was dated 31st March 2021 with Document Identification Number (DIN) CPC./1920/A6/2014472753. It was mentioned in the intimation that "This communication is computer generated and may not contain signature. Where sent by email, this is signed with the digital signature of the Income Tax Department - CPC, which is obtained from a certifying authori....
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.... for A.Y. 201920 was made with a refund claim. Thus, the extended time limit till 31.01.2024 was squarely applicable for processing the return of the assessee for this year. The return of the assessee was, in fact, processed on 31.03.2021, which was within the original extended time limit. Considering the fact that the CBDT had subsequently extended the time limit for processing the return till 31.01.2024; the intimation dated 31.03.2021, even though it was digitally signed and communicated on 01.04.2021, cannot be held as barred by limitation. Therefore, the legal ground raised by the assessee in this regard is rejected. 20. The assessee has also taken a ground and contended that the exact type of adjustment, as stipulated in the clauses (i) to (vi) of Section 143(1) of the Act, was not mentioned in the intimation. There is no dispute to the fact that any incorrect claim, if it was apparent from any information in the return, was liable for adjustment while processing the return. From the intimation sheet as sent by the CPC, it is found that the adjustment of Rs. 5,87,43,293/- was categorically indicated at Sl. No. 14 of the Annexure. In fact, this annexure contains details of ....
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.... our attention to the fact that in the return of income for AY 2019-20, the email ID "[email protected]" was mentioned for transmitting all communications electronically. 22. We have carefully considered the evidences brought on record and the submission of the assessee. The "User Profile Administration" sheet contains only a summary of the action taken by the CPC on the return of the assessee for the A.Y. 2019-20. Each action as mentioned in this sheet is to be backed by independent evidence. The Revenue has also filed a copy of the communication dated 30.12.2020 from which it is found that the assessee was communicated about the proposed adjustment under Section 143(1)(a) of the Act for A.Y. 2019-20. A copy of the said communication is reproduced below: 23. It is, thus, evident from the above fact that the assessee was given prior intimation for proposed adjustments before processing of the return of income for the A.Y. 2019-20, as stipulated in Proviso to Section 143(1) of the Act. The communication bears Document Identification No. (DIN) and the nature of adjustment was also explained in the Annexure in Part-A. While five of the proposed adjustments were in re....
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....der pronounced in the Open Court on 16/07/2024 ============= Document 1 VALEA CON AEM IN VAN MAN KAN VARALAN ALINA आयकर केनà¥à¤¦à¥à¤° CENTRALZED PROCESSING CENTER INCOME A MENT Bengaluru-560500 Telephone: 18001034455 (Toll Free) or 080-46605200 Name and Address CHECKMATE SERVICES PRIVATE LIMITED GF 6-9 Aman Tower Suvas Colony FATEHGUNJ VADODARA GUJARAT 390002 [[[फोन- १८००१०३४४५५] (टॉलरी) OLD VELO गाम और पाइ चेकोटबी सापà¥à¤°à¤¾à¤ˆà¤µà¥‡à¤Ÿ लिमिटेड à¤à¤¨à¤° e afetarice गà¥à¤œà¤°à¤¾à¤¤ ३९०००२ Document Identification No. CPC/1920/G22/2013189988 15 JU Date of Communication: Fafa 30-12-2020 ITR Form Type Assessment Year PAN सà¥à¤¥à¤¾à¤¯à¥€ खाता and are re निरà¥à¤§à¤¾à....
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....mount entered in Schedule Sl are Schedule Sl inconsistent with the corresponding 164654074 227697807 63043733 amounts entered in Sch CG/ Sch OS The claim of set off of current year loss shown in part-BTI is not consistent with Schedule Part the loss computed in the schedules of the corresponding heads of Income OR the priority of set off of the current year loss 83025340 20781607 63043733 BTI is not consistent with the provisions of the Act. In Schedule BP 39.Net Profit or loss from business or profession other than speculative business and specified Schedule BP business, after applying rule 7A, 78 or 8). if applicable (if rule 7A, 7B or B is not applicable, enter same figure as in 38) (If loss take the figure to 21 of item E), are inconsistant In Schedule BP, Sl.No. 32. Any amount disallowed under section 43B in any -83825340 -20781607 63043733 preceding year but allowable during the previous year(10h of PartA-O1) is not Schedule BP 4300440 4300440 consistent with amount shown in S.No.10.h. Total amount allowable under section 438(total of 10a to 10g) in sched....