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TMI Blog2021 (10) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition u/s 43B - This Tribunal has consistently viewed that the employees contribution to PF and ESI is allowable deduction if the same is paid before the due date of filing the return of income. See M/S ESSAE TERAOKA PVT LTD VERSUS DEPUTY COMMISSIONER OF INCOME-TAX [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] - Decided in favour of assessee. - I.T.A.No.130/Viz/2021 - - - Dated:- 23-9-2021 - Shri N.K.Choudhry, Hon ble Judicial Member And Shri D.S. Sunder Singh, Hon ble Accountant Member For the Appellant : Shri G.V.N.Hari, AR For the Respondent : Shri B.Rama Krishna, DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Centre in order No.ITBA/NFAC/S/250/2021-22/1033612516(1) dated 22.06.2020for the Assessment Year (A.Y.) 2018-19. 2. In this case, assessee filed the return of income u/s 139(1) of the Income Tax Act, 1961 (in short Act ) and the Centralized Processing Center (CPC), Income Tax Department has made adjustments of ₹ 16,80,840/- towards disallowance of employees contribution to PF and ESI while pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Andhra Trade Development Corporation which reads as under : We have heard both the parties, perused the material placed on record. As per the adjustments made by the CPC, Bangalore to the extent of ₹ 7,31,016/- u/sec. 143(1)(a) is an issue which required to be verified with the relevant documents. Therefore, the adjustments are not within the scope provided u/sec. 143(1) (a) of the Act. As per proviso to section 143(1)(a), the AO is required to give an intimation before making such adjustments, either in writing or in electronic mode and the department has not demonstrated that it has given an intimation to the assessee proposing to make such adjustments. Therefore, the adjustment made by the CPC u/sec. 143(1)(a) is beyond the scope of the said section, hence, not permissible and accordingly deleted. Even otherwise, the ld. CIT(A) has followed the decision of this Tribunal while allowing the set off of losses and the department did not place any other decision of the superior Court to controvert the decision relied upon by the ld. CIT(A) cited supra. Therefore, the issue is squarely covered by the decision of this Tribunal against the Revenue, hence, we find no reas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43B of the Act, any sum payable by the assessee as an employer by way of contribution to PF shall be allowed, if the same is paid on or before the due date of filing of return of income u/s 139(1) of the Act. 6. The only issue to be resolved is whether the assessee would be entitled to claim deduction for the employees contribution made to PF after the due date prescribed under the PF Act, but before the due date prescribed for filing of income tax return in the light of the provisions contained in section 36(1)(va) of the Act and section 43B(b) of the Act. It is the contention of the assessee that there is no distinction between employer and employee contribution after omission of second proviso of section 43B of the Act by Finance Act, 2003 w.e.f. 1.4.2004. We find force in the arguments of the assessee for the reason that there is no difference between employees and employer contribution under the PF Act. Section 6 of Provident Fund Act provides for contribution and the manner in which such contribution shall be made. Paragraph 30 of the PF Scheme provides for payment of contributions. As per the said scheme, the employer at the first instance shall make the total contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, then deduction is to be allowed under the provisions of section 43B of the Act. 8. The Hon ble Karnataka High Court, in the case of Essae Teraoka (P) Ltd. Vs. DCIT 366 ITR 408 took the view that the word contribution occurring in section 43B of the Act would include employees contribution to PF in the light of the definition of the word contribution as per the provisions of section 2(c) of the PF Act. As per the said section, contribution would mean both employer s contribution and employees contribution. Accordingly, it was held that the provisions of section 43B of the Act allowing deduction for payment made before the due date of filing of Income Tax return cannot be ignored. Similarly, the ITAT, Hyderabad Tribunal in the case of Tetra Soft (India) Pvt. Ltd. Vs. ACIT (2015) 40 ITR (Trib) 470 held that when assessee remitted employees contribution to PF within due date of filing return of income u/s 139(1) of the Act, amount of employees contribution to PF cannot be disallowed. Similar view was upheld by the Chennai bench of the ITAT, in the case of ACIT Vs. Farida Shoes Pvt. Ltd. (2016) 46 CCH 29. The coordinate bench held that if assessee had not deposited em ..... X X X X Extracts X X X X X X X X Extracts X X X X
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