AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 1609
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....stances of the Appellant's case, the Ld. CIT(A) has erred in treating employees contribution to National Pension Scheme as Employees contribution to Provident Fund and ESIC. The Ld. CIT(A) ought to have appreciated that no due date of payment is prescribed for payment of such employees contribution to NPS. 1.2 In law and on the facts and in the circumstances of the Appellant's case, the Ld. CIT(A) has erred in not following decision of CIT(A) rendered in other group cases and relied upon by appellant in appellate proceedings. 2. In law and in the facts and the circumstances in the case of the appellant, the Ld. CIT(A) has grossly erred in making disallowance u/s 43B amounting to Rs. 64,31,272/- as the same has been rightly claimed by the appellant while filing return of income. 2.1 In law and on the facts and in the circumstances of the Appellant's case, the Ld. CIT(A) has erred in treating contribution to Bonus as Employees contribution to Provident Fund and ESIC without appreciating the fact that same was actually paid in the current year and was duly disallowed in earlier years. 3. In law and in the facts and the circumstances in the case of the appellant, the Ld. CIT(A)....
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....o any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees. Section 36 of the Act pertains to the other deductions. Subsection (1) of the said section provides for various deductions allowed while computing the income under the head Profits and gains of business or profession. Clause (va) of the said sub-section provides for deduction of any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation to the said clause provides that, for the purposes of this clause, "due date to mean 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 fund under any Act, rule, order or notification issued there-under or under any standing order, award, contract of service or otherwise. Section 43B specifies the list of deductions that are admissible under the Act only upon their actual payment. Employer's ....
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....ion 2 applies. These amendments will take effect from 1st April 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years" 9. Accordingly, the relevant extract of amendments made to section 36(1)(va) and section 43B by the Finance Act, 2021 are reproduced hereunder for clarity and immediate relevance: 1. Amendment of section 36 "In section 36 of the Income-tax Act, in sub-section (1), in clause (va), the Explanation shall be numbered as Explanation 1 thereof and after Explanation 1 as so numbered, the following Explanation shall be inserted, namely: - Explanation 2.-For the removal of doubts, it is hereby clarified that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the "due date" under this clause;" 1. Amendment of section 43B "In section 43B of the Income-tax Act, after Explanation 4, the following Explanation shall be inserted, namely: - Explanation 5.-For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his ....
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....ure that beneficial legislations for the welfare of employees are complied with strictly. If the payment is not made within the due date, there is contravention of the provisions of the EPF and the ESI Act for which provision is made by way of payment of interest, damages ana prosecution. But under the Income-tax Act, the defaulter loses the benefit of deduction otherwise allowable to him. There is no substance in the contention of the petitioner that this would result in double jeopardy because the provisions deal with different aspects and different benefits. Whereas the relevant beneficial legislations in favour of the employees provide for compliance on the pain of payment of interest, damages and prosecution, the Income-tax Act provides for compliance by denying the benefit of deduction which is otherwise available. There was also no substance in the contention of the petitioner that the provisos (I) and (2) to section 43B were discriminatory inasmuch as the sum referred to in clause (b) was treated differently from the sums referred to in clauses (a), (c) and (d). Article 14 cuts at the root of discrimination either by legislation or by administrative action. The rule of eq....
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....itted that the Assessing Officer-CPC has granted a sum of only Rs. 2,81,37,288/- under Section 43B of the Act and thereby disallowed a sum of Rs. 64,31,273/-. The Assessing Officer-CPC while passing the intimation order under Section 143(1)(a) of the Act has disallowed the aforesaid amount of Rs. 64.34 lakhs by stating the following two reasons: (a) amount disallowed in any preceding previous year, but allowable during previous year under schedule-BP is inconsistent with the amount disclosed under the schedule-OI (b) amount disallowed in preceding years but allowed in the previous year is inconsistent with the amount reflected in Tax Audit Report 6. Before us, the assessee submitted that in the return of income, the assessee has claimed deduction of preceding years amounting to Rs. 64,31,273/- pertaining to bonus under Section 43B of the Act, as the same was actually paid in the previous year under consideration. Further, such claim is duly certified by the tax auditor in the Tax Audit Report. Further, screenshot of relevant part of Tax Audit Report was also produced before us for reference, wherein the aforesaid amount of Rs. 64,37,273/-has been certified by the tax auditors.....
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....een made within the due date and hence there is no ground for disallowance of such contributions, when all payments have been made within the due dates mentioned in the Tax Audit Report for the year under consideration. The Counsel for the assessee submitted that "any other welfare fund" mentioned in the tax audit report refers to payment of the employee's contribution to National Pension Scheme. Further, the payment to the Scheme has been duly made within the due date as has been mentioned in the Tax Audit Report as well. Further, the counsel for the assessee submitted that NPS is regulated by Pension Fund Regulatory and Development Authority (PFRDA) and the PFRDA Act, 2013 applies to it. It was submitted that there is no due date prescribed by the PFRDA as to the due date when payment is required to be made to the NPS account. Hence, the impugned adjustment made by the Assessing Officer-CPC is not justified as there is no due date prescribed in the respective Act in respect to employee's contribution to National Pension Scheme and the payment has been made before the filing of return of income as per Section 139(1) of the Act, for the year under consideration. 11. In response, t....