TaxTMI 
TaxTMI 
2025 (12) TMI 855
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....year 2019-20 and 2020-21. 3. In this case appellate orders were passed on 28 June 2024 which was stated to be received as per form No. 36 on 28 June 2024 however the appeals were filed on 11 December 2024. Thereby there is a delay of 102 days in filing of the appeal. 4. The assessee has filed an application for condonation of delay under section 5 of the limitation act, 1963 stating that that the mentioning of the date of receipt of the order on 28th of June 2024 is out of the abundant caution and the assessee is uncertain about the date of receipt of such order. It was submitted that the appellant after receipt of the order of the CIT(A) approaches chartered accountant who has not advised the assessee to file an appeal against the order of the learned CIT(A) to tribunal since he was of the view that the learned Commissioner of income tax (appeals) has remanded the matter to the learned assessing Officer by considering the decision of this Tribunal in case of MTR versus income tax officer (2023) 152 taxmann.com 189 and directed the learned assessing officer to verify the facts of the case and decide the quantum of disallowance under section 36(1)(va) of the act. Accordingly i....
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.... of the learned assessing officer. However, when the learned assessing officer took view that the complete disallowance is required to be repeated, he was advised to file an appeal before the coordinate bench which has been made by the assessee and therefore the delay was for a sufficient cause. We do not find that there is any mala filed or laxity on the part of the assessee in not filing appeal in time. Therefore, the delay of 102 days in both the appeals are condoned and the appeal of the assesses are admitted. 8. The solitary issue in this appeal is that assessee is an individual assessee filed its return of income for assessment year 2019-20 on 6 February 2020 at a total income of Rs. 24,483,310/- showing income from house property, income from business and income from other sources. This return of income was processed under section 143(1) of the act on 14 July 2020 determining the assessee's total income at Rs. 34,604,020/-. The CPC made the following adjustment (1) disallowance under section 36(1)(va) being employees' contribution to provident fund and employees State insurance scheme remitted beyond the due date for payment in the respective statutes of Rs. 10,04....
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....) there was no response and therefore he upheld the above adjustment under section 143(1) of the act. 11. Therefore, against this appellate order, the assessee is in appeal before us. 12. The learned authorized representative submitted that that the learned central processing Centre has not given the assessee an intimation of the adjustment proposed to be made as per the first proviso to section 143(1)(a) of the act. The proposed intimation was not issued to the appellant as can be seen by the screenshot of the details of the email ID that the adjustment was sent to income tax e-filing portal. It was further submitted that that the failure to provide the proposed adjustment to the appellant is in violation of the provisions of the first proviso to section 143(1)(a) of the act and consequently the intimation issued under section 143(1) of the act is bad in law. It was further stated that the intimation issued is also issued without providing an opportunity of personal hearing in violation of the principles of natural justice. He relied upon the decision of the coordinate bench in the case of Deputy Commissioner of income tax versus micro land Ltd in ITA No. 1154/Bangalore/2024....
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....ance act 2021 is prospective in nature and the same is applicable from the assessment year 2021-22 onwards and is not applicable to the impugned assessment year that is assessment year 2020-21 and 2019-20. He submitted that both the above amendment imposes a burden on the assessee in so far as the employees contribution to relevant fund should have been deposited by the employer before the due dates prescribed under the relevant statutes and the provisions of section 43B of the act shall not apply and shall be deemed never to have been applied for the purpose of determining the due date under that clause. Consequently, there exist the presumption towards such an amendment being applicable only prospectively. Reliance was placed on the decision of the honourable Supreme Court in case of CIT versus Vatika township private limited (367 ITR 466). 16. The authorized representative further put to our kind attention the notes on clauses and the memorandum explaining the provisions in the Finance Bill 2021 stating that in respect of the insertion of explanation 2 to section 36(1)(va) and explanation 5 to section 43B of the act will take effect from 1 April 2021 and will accordingly appl....
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.... it is the issue whether adjustment under section 143(1)(a) of the act can be made with respect to the employees' contribution of provident fund and employees State insurance scheme, if those are paid beyond the due date specified in this respective act. He submitted that at the time when the adjustment was made, the decision of the honourable Karnataka High Court was in favour of the assessee and therefore no adjustment could have been made. 22. After hearing the matter, it has come to our notice that the honourable Delhi High Court in case of Woodland Aero club private limited dated 8 September 2025 in TS-1187-HC-2025 (Del) has decided the identical issue and therefore the case was picked up for clarification. 23. In the clarification the learned authorized representative once again referred to the decision of the honourable Delhi High Court in case of principal Commissioner of income tax versus TV today network Ltd (supra) wherein it has been held in paragraph No. 41-45 to state that the amendment has been made with effect from 1 April 2021 and further referred to the memorandum explaining the provisions of the Finance Bill 2021 wherein it is mentioned that the above a....
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....ision of the honourable Supreme Court. 26. It is the provision of the law that that employee's contribution of this respective acts collected by the employer's income of the assessee in terms of provisions of section 2(24)(x) of the act. Thereafter at the time of deposit of those sums, within the due dates prescribed in the respective act, deduction is allowable under the provisions of section 36(1)(va) of the act. To this section an explanation-1 was inserted with effect from 1 April 2021 by The Finance Act 2021 providing that the 'due date' means the date by which the assessee is required as an employer to credit an employee's contribution to the employees account in the relevant fund under any act, rule, order or notification issued there under or under any standing order, award, contract of services or otherwise. Further explanation 5 was also added to the provisions of section 43B of the act by The Finance Act, 2021 with effect from 1 April 2021 providing that "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 h....
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....36 of the Act. Though section 43B of the Act covers only employer's contribution and does not cover employee contribution, some courts have applied the provision of section 43B on employee contribution as well. There is a distinction between employers contribution and employee's contribution towards welfare fund. It may be noted that employee's contribution towards welfare funds is a mechanism to ensure the compliance by the employers of the labour welfare laws. Hence, it needs to be stressed that the employer's contribution towards welfare funds such as ESI and PF needs to be clearly distinguished from the employee's contribution towards welfare funds. Employee's contribution is employee own money and the employer deposits this contribution on behalf of the employee in fiduciary capacity. By late deposit of employee contribution, the employers get unjustly enriched by keeping the money belonging to the employees. Clause (va) of sub-section (1) of Section 36 of the Act was inserted to the Act vide Finance Act 1987 as a measure of penalizing employers who mis-utilize employee's contributions. Accordingly, in order to provide certainty, it is proposed to -(i) am....