TaxTMI 
TaxTMI 
2023 (4) TMI 1456
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....es of the case and in law, the Learned Commissioner of Income Tax (Appeal) (Ld. CIT-A) has erred in upholding the impugned assessment order, passed u/s 143(1) of the IT Act, where disputed additions have been made without affording opportunity of being heard. 2. On the facts, in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the disallowances of payment of employers and employees contribution to ESIC and PF amounting to Rs.1,00,240/- which were made before the due date of filing of the Return. 3. The appellant therefore prays your honour to be kind enough to - 1. Admit the appeal and grant stay against the recovery of demand, 2. Set aside the order of A.O., 3. De....
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....the provisions. 5.1. Before us the ld. Counsel for the assessee submitted that the judgment of the Hon'ble Supreme Court was rendered in the assessment proceedings passed u/s.143(3) and not u/s.143(1), where the scope of adjustment is very limited. In its support, he relied upon the decision of the ITAT Mumbai 'SMC' Bench in the case of M/s. P R Packaging Services vs. CIT in ITA No.2376/Mum/2022 order dated 07/12/2022. 5.2. After considering the submissions made by the assessee as well as the findings given in the impugned orders, we find that there is no dispute that employees' contribution towards PF and ESI has been made late and beyond the due date prescribed u/s.36(1)(va) of the respective acts. The issue whether, employees' cont....
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....F, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods. That Parliament intended to retain the separate character of these two amounts, is evident from the use of different language. Section 2(24)(x) too, deems amount received from the employees (whether the amount is received from the employee or by way of deduction authorized by the statute) as income - it is the character of the amount that is important, i.e., not income earned. Thus, amounts retained by the employer from out of the employee's income by way of deduction etc. were treated as income in the hands of the employer. The significance of this provision is that on the one hand it brought into the fold of "income" amounts that were receipts or ded....
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....s its character as an income (albeit deemed), by virtue of section 2(24)(x) - unless the conditions spelt by Explanation to section 36(1)(va) are satisfied 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 amounts - the employer's liability is to be paid out of its income whereas the second is deemed 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. 54. In the opinion of this Court, the reasoning in the impugned judgmen....
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....ich 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 fin....
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....ny information in the return; (iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure [or increase in income] indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under [section 10AA or under any of the provisions of Chapter VI-A under the heading "C.-Deductions in respect of certain incomes", if] the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 ....