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TMI Blog2021 (10) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... has further erred in making the addition by not following the decision of Jurisdictional High court. 2. The appellant craves to alter, amend and modify any ground of appeal. 3. Necessary cost be awarded to the assessee." 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. Briefly the facts of the case are that the assessee filed its return of income on 24.10.2018 declaring total income of Rs. 6,35,76,680/- which was processed U/s 143(1) and in terms of intimation dated 28/10/2019 issued by CPC, it made disallowance of Rs. 12,05,413/- towards employee's contribution towards ESI and PF. On appeal, the ld. CIT(A), has confirmed the disallowance made U/s 143(1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e adjustment is beyond the scope of Section 143(1) of the Act. It was accordingly submitted that the adjustment so made by the CPC and confirmed by the ld. CIT(A) NFAC may be directed to be deleted. 5. 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 Rs. 12,05,413/- 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 fai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stments as envisaged U/s 143(1)(a)(iv) of the Act. 6. We have heard the rival contentions and perused the material available on record. In case of K.P. Airtech vs. DCIT (in ITA No. 41 &42/JP/2021 dated 16.08.2021, the Coordinate Bench had extensively dealt with the identical matter relating to employee's contribution towards ESI/PF and our findings therein read as under: "16. We have heard the rival contentions and perused the material available on record. On perusal of the audit report submitted by the assessee as part of his return of income, it is noted that the assessee has deposited the employees' contribution towards ESI and PF well before the due date of filing of return of income u/s 139(1) and the last of such deposits were made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the case of Allied Motors (P) Ltd. (supra). 21. A conjoint reading of the proviso to Section 43-B which was inserted by the Finance Act, 1987 made effective from 01/04/1988, the words numbered as clause (a), (c), (d), (e) and (f), are omitted from the above proviso and, further more second proviso was removed by Finance Act, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the amounts can be paid later on subject to payment of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. 23. Thus, we are of the view that where the PF and/or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B 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 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jasthan. 20. In light of aforesaid discussion and in the entirety of facts and circumstances of the case, the addition by way of adjustment while processing the return of income u/s 143(1) amounting to Rs. 1,25,431/- so made by the CPC towards the delayed deposit of the employees's contribution towards ESI and PF though paid well before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted as the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act in view of the binding decision of the Hon'ble Rajasthan High Court. 21. Given that we have adjudicated on the merits of the case whereby we have directed to delete the addition so made, the other ground of appeal relat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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