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TMI Blog2021 (12) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeals) - 11 should have, by following the principles laid down by binding precedents allowed the appeal. On the contrary, the dismissal of appeal despite binding judicial precedents makes the impugned order bad in law and liable to be quashed. 4. In any case and without prejudice, the learned Commissioner of Income-tax (Appeals) 11 has erred in confirming the adjustment u/s. 143(1)(a) as done by CPC. The adjustment done by CPC in the Intimation being beyond the purview of section 143 (1)(a) and the adjustment being not prima facie adjustment should have been deleted by the Commissioner of Income-tax (Appeals)-11, Instead, the learned Commissioner of Income-tax (Appeals)- 11, has erred in holding the adjustment to be in order. 5. In any case, the learned Commissioner of Income-tax (Appeals) - 11 has erred in; a) holding that the employee's contribution for PF and ESI are allowable as deduction only when deposited by the employer within the due dates prescribed under relevant Act or funds. b) holding that for the relevant year, the provisions of section 43B of the Act were not applicable to the employees share of contribution of the ESI & PF. c) Not appreciating that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Essac Teraoka (P.) Ltd. v. Dy. CIT 366 ITR 408 (Kar.), wherein it has held as under: "15. From bare perusal of this provision, it is clear that under the provision, for IT Act, an extension is given to the employer to make payment of contribution to provident fund or any other fund till the "due date" applicable for furnishing the return of income under sub-section(1) of section 139 of the IT Act in respect of the previous year in which the liability to pay such sum was incurred and the evidence of such payment is furnished by the assessee along with such return. In short, this provision states, notwithstanding anything contained in any other provision contained in this Act, a deduction otherwise allowable in this Act in respect of any sum payable by the assessee as an employer by way of contribution to any fund such as provident fund shall be allowed if it is paid on or before the due date as contemplated under Section 139(1) of the IT Act. This provision has nothing to do with the consequences, provided for under the PF Act/PF Scheme/ESI Act, for not depositing the "contribution" on or before the due dates therein. 16. In the present case, admittedly, though the emp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under subsection(1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 21. The submission of Mr. Aravind, learned counsel for the revenue that if the employer fails to deduct the employees contribution on or before the due date, contemplated under the provisions of the PF Act and the PF Scheme, that would have to be treated as income within the meaning of Section 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. We agree with the view taken by this Court in W.A.No.407712013. 23. In the result, the appeal is allowed and the substantial question of law framed by us is answered in favour of the appellant-assessee and against the respondent-revenue. There shall be no order as to costs. 10. Further, he relied on the judgment of Hon'ble Karnataka High Court in the case of CIT v. Sabari Enterprises [2008] 298 ITR 141 (Kar.) has held as under: "This clause is inserted by the Finance Act with effect from April 1, 1988. The Explanation to this clause is read very care ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion has come into force, with effect from April 1, 2004. The reliance placed upon the decision of the apex court in Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677 and also on the decision in General Finance Co. v. CIT (Asst.) [2002] 257 ITR 338 (SC) in respect of applicability of section 43B(b) and also omission of clause (a) or (c) or (d ) or (e) or (B referred to above occurred in the first proviso to section 43B, supports the case of the assessees and also relevant paragraphs extracted from Allied Motor's case [1997] 224 ITR 677 and paragraph 59 referred to supra in this judgment from the Finance Bill with all fours supports the case of the assessee/ respondents. Therefore, we have to answer the substantial question of law No. 1 framed by this court in these appeals at the instance of the Revenue against them, viz., in the negative. Accordingly, we answer the substantial question No.1 framed in these appeals in the negative. 12. Further, the ld.AR relied on the following judgments:- 1. In Re-Cognizance for Extension of Limitation - Supreme Court of India in M.P No.665/2021 in SMW(C) No.3/2020 dt.19/7/2021. 2. Salzgitter Hydraulics Pvt. Ltd vs. ITO [2021] 128 taxman.co ..... 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