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TMI Blog2022 (2) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... C has considered the date of uploading the intimation under section 143(1)(a) in the registered account of the assessee on the ITBA portal in the absence of any SMS alert on the registered mobile number or email on the registered e mail Id of the assessee. ii. NFAC has not considered the CBDT Circular No. 10/2021 extending the period of limitation with respect to appeals falling due for filing on or after 15.03.2020 in obedience to the Honourable Supreme Court decision on this issue due to the unprecedented COVID-19 Pandemic. 2. The Central Processing Centre (CPC for short) is not justified in making an addition of Rs. 3,90,877/- being Employees' Contribution to Provident Fund and Employees' State Insurance Contribution on the plea that the same have been paid after the due dates under the respective acts though the same have been paid within the due date for filing the return of income under section 139(1) of the Income-tax Act, 1961. 3. The appellant prays to add to; delete; alter; modify all or any the above grounds of appeal." 3. In this case, assessee filed its return of income on 06/10/2018 which was later rectified u/sec. 154 of the Act. The return was process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return u/sec. 139(1) of the Act. 12. We have heard both the parties and perused the material placed on record. In the instant case, there is no dispute that the return was processed u/s 143(1) and there was no scrutiny assessment made u/s 143(3) of the Act. It is settled issue that no debatable issues are permitted to be made adjustments u/s 143(1) of the Act. In the instant case, what was added in the intimation u/s 143(1) was the employees' contribution to PF and ESI. Hon'ble Madras High Court in the case of Redington (India) Ltd. held that employees contribution to PF and ESI is also allowable deduction, if, the same is paid before the due date for filing the return of income. This Tribunal in the case of Andhra Trade Development Corporation in I.T.A. No.434/Viz/2019 dated 05.05.2021 held that debatable issues are not permitted to be made adjustments while processing the return of income u/s 143(1) of the Act. For the sake of clarity and convenience, we extract para No.6 of the order 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 ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontribution to provident fund is deductible under the provisions of section 36(1)(va) of the Act, if the same is paid on or before the due date specified under the provident fund Act. The A.O. further was of the opinion that in view of the clear provisions of section 2(24)(x) r.w.s. 36(1)(va) of the Act, any recovery from employees towards provident fund contribution is deemed to be income of the assessee, if the employer not paid the same to the provident fund account of the employee within due date specified under the provisions of PF Act. It is the contention of the assessee that second proviso to section 43B of the Act provides that no deduction shall be allowed unless such sum is actually been paid on or before due date as specified in explanation to 36(1)(va) of the Act which was omitted by the Finance Act, 2003 w.e.f. 1.4.2004 and accordingly, there was no special provision regarding employees' contribution to PF. It is further contended that as per the amended provisions of section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 43B of the Act provides for certain deductions to be allowed only on actual payment basis. Sub clause (b) of section 43B of the Act covers any sum payable by the assessee as an employer by way of contribution to any Provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees. The proviso to section provides that any sum paid by the assessee on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made under the provisions of section 43B of the Act. A careful consideration of section 43B of the Act, it is clear that an extension is granted to the assessee to make the payment of PF contributions or any other fund till the due date of furnishing return of income u/s 139(1) of the Act. Therefore, in our opinion, there is no difference between employees and employer contribution to PF and if such contribution is made on or before the due date of furnishing return of income u/s 139(1) of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted said contribution to respective fund account on the date as prescribed in explanation to section 36(1)(va) of the Act, disallowance made by the A.O. was just and proper. Though, the D.R. relied upon certain judicial precedents which are in favour of the revenue, in view of the decision of Hon'ble Supreme Court, in the case of CIT Vs. M/s. Vegetables Products Ltd. reported in 88 ITR 192, wherein the Hon'ble Supreme Court held that if two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted, therefore, by respectfully following the decision of Supreme Court, when divergent views are expressed by different judicial forums, we prefer to follow the views expressed by the Courts which are in favour of the assessee. 10. Considering the facts and circumstances of this case and also following the judicial precedents as discussed above, we are of the view that there is no distinction between employees' and employer contribution to PF, and if the total contribution is deposited on or before the due date of furnishing return of income u/s 139(1) of the Act, then no disallowance can be made towards employees' contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X
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