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TMI Blog2022 (10) TMI 939X X X X Extracts X X X X X X X X Extracts X X X X ..... Member And Ms. Padmavathy S, Accountant Member For the Appellant : Smt. Tanmayee Rajkumar, Advocate For the Respondent : Shri Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru ORDER PER PADMAVATHY S., ACCOUNTANT MEMBER These appeals by the assessee are against the orders of the CIT(Appeals), National Faceless Assessment Centre, Delhi [NFAC] dated 26.11.2021 and 7.9.2021 for the assessment years 2018-19 and 2019-20 respectively. 2. There is a delay of 103 days in filing both the appeals before the Tribunal for both AYs 2018-19 and 2019-20. The ld. AR submitted that though the appeals ought to have been filed before the Tribunal on or before 6.11.2021 and the of delay is 227 days from the date of receipt of CIT(Appeals) s order on 7.9.2021, the Supreme Court by orders dated 23.3.2020, 27.4.2021 has extended the period of limitation from 15.3.2020 to 28.2.2022 due to COVID-19. Therefore the effective date of the appeals being time barred are for 103 days from 30.5.2022 to 9.9.2022. The assessee filed an affidavit from the managing director of the assessee stating the reasons for delay in filing the appeal and the ld AR prayed for condonation of the delay. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon'ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre , ITA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO. In the aforesaid decision, the Hon'ble Court found that the very liability of the assessee was non-existent and therefore condoned the delay in filing appeal. In condoning the delay in filing the appeals, the expression 'sufficient cause' should receive liberal construction and advancement of substantial justice is of prime importance. Discretion of condoning the delay has to be exercised on the facts of each case. 4. Keeping in mind the aforesaid principles, we find that the explanation of the assessee for delay in filing the appeals in terms of assessee undergoing overall change in management and change in company personnel are bonafide and genuine reasons which constitute 'sufficient cause' for the delay. The number of da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 139(1) of the Act and otherwise allowable u/s. 43B of the Act. 12. The ld. DR brought to our attention the latest decision of the Hon ble Supreme Court in the case of Checkmate Services (P.) Ltd. Vs CIT-1, [2022] 143 taxmann.com 178 (SC) where the Apex Court has held that Section 43B(b) does not cover employees' contributions to PF,ESI etc deducted by employer from salaries of employees and that employees contribution has to be deposited within the due date u/s 36(1)(va) i.e. due dates under the relevant employee welfare legislation like PF Act, ESI Act etc. failing which the same would be treated as income in the hands of the employer u/s.2(24)(x). 13. We have heard both the parties and perused the material on record. We notice that the Hon ble Supreme Court in the case of Checkmate Services (supra) has considered the issue of whether the employees contribution paid before due date for filing the return of income u/s.139(1) whether otherwise allowable u/s.43B, putting to rest the contradicting decisions of various High Court. The relevant extract of the decision is as given below 52. When Parliament introduced Section 43B, what was on the statute book, was on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ensure that if assessees are following the mercantile method of accounting, nevertheless, the deduction of such liabilities, based only on book entries, would not be given. To pass muster, actual payments were a necessary pre-condition for allowing the expenditure. 53. The distinction between an employer s contribution which is its primary liability under law in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is, thus crucial. The former forms part of the employers income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) - unless the conditions spelt by Explanation to Section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts the employer s liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the employees income and held in trust by the employer. This marked distinction has to be borne while interpreting the obligation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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