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TMI Blog2022 (5) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax audit report, the auditor is expected to report the information as per the provisions of the Act, and the tax auditor has done that, but that information ceases to be relevant because, in terms of the law laid down by Hon ble Courts, which binds all of us as much as the enacted legislation does, the said disallowance does not come into play when the payment is made well before the due date of filing the income tax return under section 139(1). Viewed thus also, the impugned adjustment is vitiated in law, and we must delete the same for this short reason as well. Adjustment in the course of processing of return under section 143(1) is vitiated in law, and we delete the same. As we hold so, we make it clear that our observations re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ational Faceless Appeal Centre (NFAC), Delhi passed under section 143(1) and 250 of the Income-tax Act, 1961. 2. Since the issues are common and identical in these appeals, hence are clubbed, heard and consolidated order is passed. 3. For the sake of convenience, we shall take up ITA No.1968/Mum/2021 for A.Y. 2018-19 as the lead case and facts narrated. The assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case, the Commissioner of Income-tax (Appeals), hereinafter referred to as the CIT (A) , has erred in confirming the order of the DCIT, CPC disallowing the claim of Rs. 10,58,135 towards contribution of Employees share in Provident fund and ESIC reported under Clause 20(b) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employee contribution to EPF /ESI. In Form 3CD the auditor only reports date of payment of the contribution of the fund. The format of Form 3CD does not ask for amount of disallowance in Clause 20(b) where payment details are disclosed in respect of employee contribution to PF and ESIC Act. 5. The Ld.AR submitted that this ground of appeal could not be raised before the Ld.CIT(A), and therefore, made an application for admission of the additional ground of appeal. After hearing the submissions of the Ld.AR and the Ld.DR, the additional ground of appeal is admitted. 6. The brief facts of the case are that the assessee company is engaged in business of manufacture of various types of laser machines and filed the return of income for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) appeal. 10. We heard the rival submissions and perused the material available on record. The Ld. AR s contentions are that the assessee for the various reasons could not deposit the employees contribution to provident fund ESIC within the time allowed under prescribed Act. Whereas, the assessee has deposited the amount before filing of the return of income U/sec139(1) of the Act. The Ld. AR referred to the chart at page 7 in CIT(A) order, whereas there is a delay in depositing the employees contribution to provident fund of Rs. 10,58,135/-and the employees contribution to ESIC Rs.3,35,129/-.The assessee has complied with the provisions of Law and deposited the contributions before the due date of filling the Return of income U/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fault in what has been reported in the tax audit report. It is not even an expression of opinion about the allowability of deduction or otherwise; it is just a factual report about the fact of payments and the fact of the due date as per the Explanation to Section 36(1)(va). This due date, however, has not been found to be decisive in the light of the law laid down by Hon'ble Courts above, and it cannot, therefore, be said that the reporting of payment beyond this due date in the tax audit report constituted disallowance of expenditure indicated in the audit report but not taking into account in the computation of total income in the return as is sine qua non for disallowance of Section 143(1)(a)(iv). When the due date under Explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 143(1), whether the insertion of Explanation 2 to Section 36(1)(va), with effect from 1st April 2021, must mean that so far as the assessment years prior to the assessment years 2021-22 are concerned, the provisions of Section 43B cannot be applied for determining the due date under Explanation (now Explanation 1) to Section 36(1)(va). That question, in our humble understanding, can be relevant, for example, when a call is required to be taken on merits in respect of an assessment under section 143(3) or under section 143(3) r.w.s. 147 of the Act, or when no findings were to be given on the scope of permissible adjustments under section 143(1)(a)(iv). That is not the situation before us. We, therefore, see no need to deal with that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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