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TMI Blog2021 (9) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... cessing the return of income u/s 143(1) so made by the CPC towards the deposit of the employees s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) is hereby directed to be deleted - Decided in favour of assessee. - ITA. No. 53/JP/2021 - - - Dated:- 15-9-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Rohan Sogani (C.A.) And Shri Rajeev Sogani (C.A) For the Revenue : Shri Ashish Nehra (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Delhi (NFAC) dated 28.05.2021 for the assessment year 2019- 20 wherein the assessee has taken the following grounds of appeal:- 1. In the facts and circumstances of the case and in law, ld. CIT(A), has erred in confirming the action of the Ld. AO, in making adjustments in the intimation under Section 143(1) which are outside the purview of Section 143(1)(a). The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the entire disallowance of ₹ 21,15,855/-. 2. In the fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the adjustment so made by the CPC and confirmed by the ld. CIT(A) NFAC may be directed to be deleted. 4. Per contra, the ld. DR submitted that as per details furnished in the tax audit report, the payment of employee s contribution of PF/ESI amounting to ₹ 21,15,855/- was not made within the prescribed due date U/s 36(1)(va) of the Act and since these amount were not disallowed in the return of income filed by the assessee, the variance between the tax audit report and ITR has been duly flagged by the CPC in the computerized processing and disallowance U/s 143(1)(a)(iv) on the basis of fact furnished by the assessee was made which clearly fails within ambit of prima facie adjustment to be carried out U/s 143(1)(a)(iv) of the Act. Further, reliance was placed on the amendment brought in by the Finance Act, 2021 wherein the explanation to Section 36(1)(va) has been introduced. It was submitted from the said amendment, it is evident that the law is and has always very clear i.e. employee s contribution to specified fund will not be allowed as deduction U/s 36(1)(va) if there is delay in deposit even by a single day as per the due dates mentioned in the respecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank of Bikaner Jaipur wherein the Hon ble High Court after extensively examining the matter and considering the various decisions of the Hon ble Supreme Court and various other High Courts has decided the matter in favour of the assessee. In the said decision, the Hon ble High Court was pleased to held as under: 20. On perusal of Sec.36(1)(va) and Sec.43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3B or under Section 36(1)(va) of the IT Act. 18. The said decision has subsequently been followed in CIT vs. Jaipur Vidyut Vitran Nigam Ltd. 363 ITR 307, CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. 366 ITR 163, CIT vs Rajasthan State Beverages Corportation Limited (supra) and PCIT vs Rajasthan Renewable Energy Corporation Ltd. In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act. 19. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon ble Rajasthan High Court and various other High Courts including Hon ble Delhi High Court in case of CIT vs AIMIL Ltd 321 ITR 508 which were brought to his notice by the ld AR during the course of appellate proceedings but has decided to follow the decision of the Hon ble Gujarat High Court in case of State Road Transport Corporation (supra). Given the divergent view taken by the Hon ble Gujarat High Court as against consistent view of other High Courts including ..... X X X X Extracts X X X X X X X X Extracts X X X X
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