TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 299
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....assed u/s 143(3) r.w.s. 143(3A) and 143(3B). As there was ambiguity of late payment of ESIC/PF, the same falls out of purview of section 143(1). 4. The appellant craves leave to add, to alter, amend, modify, sub statute, delete and or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. 3. Ground Nos. 1 & 2 are regarding disallowance made u/s 36(1)(va) of the Income-tax Act, 1961, on account of belated payment for Employees' contribution to P. F. and ESIC. 4. We have heard the Ld. Authorized Representative of the assessee as well as Ld. Departmental Representative and have perused the relevant material on record. This issue of addition made on account of belated payment of employees' contribution to P. F. and ESIC is now covered by the decision of Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. vs. CIT-I, 448 ITR 518, and the relevant part of the decision in paras 51 to 55 are as under :- "51. The analysis of the various judgments cited on behalf of the assessee i.e.,CIT v. Aimil Ltd. [2010] 188 Taxman 265/321 ITR 508 (Delhi); CIT v. Sabari Enterprises [2008] 298 ITR 141 (Kar.); CIT v. Pamwi Tissues Ltd. [2009] 31....
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....mployees' share to their credit with the relevant fund is to be treated as deduction (Section 36(1)(va)). The other important feature is that this distinction between the employers' contribution (Section 36(1)(iv)) and employees' contribution required to be deposited by the employer (Section 36(1)(va)) was maintained - and continues to be maintained. On the other hand, section 43B covers all deductions that are permissible as expenditures, or out-goings forming part of the assessees' liability. These include liabilities such as tax liability, cess duties etc. or interest liability having regard to the terms of the contract. Thus, timely payment of these alone entitle an assessee to the benefit of deduction from the total income. The essential objective of section 43B is to ensure that if assessees are following the mercantile method of accounting, nevertheless, the deduction of such liabilities, based only on book entries, would not be given. To pass muster, actual payments were a necessary pre-condition for allowing the expenditure. 53. The distinction between an employer's contribution which is its primary liability under law - in terms of section 36(1)(iv),....
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.... law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts 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. 55. In the light of the above reasoning, this court is of the opinion that there is no infirmity in the approach of the impugned judgment. The decisions of the other High Courts, holding to the contrary, do not lay down the correct law. For these reasons, this court does not find any reason to interfere with the impugned judgment. The appeals are accordingly dismissed." Accordingly, following the judgement of Hon'ble Supreme Court Ground Nos. 1 & 2 of the assessee's appeal stand dismissed. 5. Ground No. 3 is regarding jurisdiction of CPC while processing the return of income u/s 143(1) for making the disallowance/adjustment on account of belated payment to P. F & ESIC. 6. We have heard the Ld. Au....
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....tion 43B of the IT Act, 1961 are not applicable in its case. 3. The assessee firm filed request for retification with the CPC against the said intimation on 02.12.2019 'but the same was rejected on 12.12.2019 vide DIN CPC/1819/T13/1918529294 'Stating that the rectification request could not be considered at the CPC and the rectification rights transferred to Assessing Officer. Now, since the case is under scrutiny, the assessee has requested for deleting the disallowance made of Rs. In support to its contention the assessee has submitted copies of challans as proof pf having made the above payments before the dup date of filing the return. 4. On verification of the details submitted and the Audit Report it is seen that the above payments represent Employees Contribution to EPF and ESI which have been made after the due date as laid down in the respective statutes. The assessee's contention that Since the above payments have been made before due date of filing return of income and hence allowable u/s.43B is not tenable. It is important to note that provisions of section 43B of the l.T.Act deals with Employers contribution to EPF/ESI etc and not Employees Contribution....
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....d assessee would be at liberty to take the remedial steps under the law. Therefore, we do not find any merit or substance in the ground no. 3. The same is dismissed. 7. The assessee has also raised an objection against the validity of the assessment order on the ground that the AO has not issued a draft order mandatory as per the e-Assessment Scheme, 2019. The Ld. Authorized Representative of the assessee has submitted that the assessment order was passed by the AO after the case of the assessee was selected for complete scrutiny in e-Assessment Scheme 2019. However, the AO has not issued the draft assessment order as well as the show cause notice to the assessee before finalizing the assessment. Thus, the Ld. Authorized Representative of the assessee has submitted that the impugned order passed by the AO is invalid and liable to be quashed, when it is not in the conformity of the e- Assessment Scheme, 2019. The Ld. Authorized Representative of the assessee has submitted that the CBDT vide notification dated 1st November, 2019, has notified the procedure for completion of Faceless Assessment and as per sub clause (xiv) and (xvi) of the Clause 2 of the said Notification, the AO is ....
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....National e-Assessment Centre to specific assessment unit in any one regional e-Assessment Centre through an automatic allocation system. Thus, under the e-Assessment Scheme, no direct correspondence is done between the assessment Unit or the regional assessment Centre and the assessee, but all the correspondences are made through National e-Assessment Centre. Therefore, all the notices issued are routed through the National e- Assessment Centre and all reply from the assessee are also routed through National e-Assessment Centre. After considering the relevant material available on record, assessment unit makes a draft assessment order in writing. A copy of such draft assessment shall be sent to the National e- Assessment Centre, which after examination of the draft assessment may decide to finalize the assessment as per the draft assessment order, if there is no variation proposed by the AO to the returned income and where a modification is proposed, which is prejudicial to the interests of the assessee, National e-Assessment Centre provides an opportunity to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the ....
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.... the High Court has allowed the said writ petition and has quashed the Assessment Order, the Revenue has preferred the present appeal. 3. From the impugned judgment and order passed by the High Court, it appears that while quashing and setting aside the Assessment Order, the High Court has heavily relied upon the CBDT Circular dated 13-8-2020 issued under section 119 of the Income-tax Act, 1961 (for short "the Act"), more particularly, para 3 of the said CBDT Circular which reads as under:- "3. Any assessment order which is not in conformity with Para-2 above, shall be treated as non-est and shall be deemed to have never been passed." 4. Shri Balbir Singh, learned ASG, appearing for the Revenue has submitted that para 3 of the CBDT Circular is similar to/pari materia to sub-section (9) of section 144B of the Act, which was earlier brought into statute with effect from 1-4-2021. However, the very pari materia provision has been omitted subsequently w.e.f. 1- 4-2021. It is submitted that omission of section 144B (9) of the Act would have a direct bearing on the merits of the impugned judgment and order passed by the High Court. 5. Learned counsel appearing on behalf of the as....