9911796707
TMI Blog2023 (5) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... respective orders of the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 11.11.2021, for the Assessment Years 2018-19 and 2019-20. 2. There is a delay of 130 days in filing the appeals. The Assessee, vide his two Applications for condonation of delay, both dated Nil (received on 16.6.2022 and 27.06.2022, respectively), submitted that the delay in filing the appeal was caused as the Assessee had met with a major accident in November, 2021 and he was on bed rest and, therefore, was unable to communicate with anyone for four to five months. In support of his averment, the Assessee has furnished Affidavits dated 15.6.2022 and 24.6.2022, respectively. He has also stated that the Hon'ble Supreme Court of India has directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as has been prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. A request has been made to condone the delay in filing both the appeals. 3. I have considered the facts and reasoning furnished by the Assessee. In view of the detailed explanation and reasoning given by the Assessee, finding tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of Hon ble Supreme Court in case of Checkmate Services P. Ltd. Ors. Vs. CIT Ors. , (supra) wherein after taking into consideration the relevant provisions of the Act as well as the provisions of relevant welfare ESI/PF schemes, it was held that the contribution by the employees to the relevant funds is the employer s income under section 2(24)(x), but the deduction for the same can be allowed under section 36(1)(va) only if such sum is deposited in the employee s account in the relevant fund before the date stipulated under the respective Act and as rightly pointed out by the DR that the ratio laid down by the Hon ble Karnataka High Court stand overruled by the decision of the Hon ble Supreme Court and the same doesn t support the case of the assessee. 6.1. Further, in the context of disallowance made by CPC while processing the return of income and specially in the context of 143(1)(a)(iv) as relevant in the instant case, we find that the matter is squarely covered by the decision of Coordinate Pune Bench in case of Cemetile Industries Ors. Vs. ITO Ors , (in ITA No. 693/PUN/2022 dt. 23/11/2022) and the relevant findings read as under: 5. Adverting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x), but the deduction for the same can be allowed only if such amount is deposited in the employee s account in the relevant fund before the date stipulated under the respective Acts. The hitherto view taken by some of the Hon ble High Courts in allowing deduction even where the amount was deposited in the employee s account before the time allowed u/s.139(1), ergo, got overturned. The net effect of this Apex Court judgment is that the deduction u/s.36(1)(va) can be allowed only if the employees share in the relevant funds is deposited by the employer before the due date stipulated in respective Acts and further that the due date u/s.139(1) of the Act is alien for this purpose. 6. There is no quarrel that the enunciation of law by the Hon ble Supreme Court is always declaratory having the effect and application ab initio, being, the date of insertion of the provision, unless a judgment is categorically made prospectively applicable. The ld. AR candidly admitted that this judgment will equally apply to the disallowance u/s.36(1)(va) anent to all earlier years as well for the assessments completed u/s.143(3) of the Act. He, however, accentuated the fact that the instant batch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; 9. Clause (i) of Explanation (a) refers to a situation in which there is a claim of income or expenditure at two places in the return of income and there is inconsistency in them. For example, if deduction is claimed under a specific section for a sum of Rs.100/- in the Profit and loss account accompanying the return, but in the computation of income, the amount has been taken as Rs.110/-, leading to inconsistency, requiring an adjustment. Clause (ii) of Explanation (a) covers a situation in which claim is made, say, for a deduction u/s.80IA for which audit report is required to be furnished, but such report has not been furnished along with the return. Clause (iii) contemplates a situation in which deduction exceeds specified statutory limit. For example, section 24(a) provides for a standard deduction for a sum equal to 30% of the annual value, but the assessee has claimed deduction at 40%. These situations warrant an adjustment. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance. However, the indication must be clear and not vague. If the indication in the audit report gives a clear picture of the violation of a provision, there can be no escape from disallowance. Turning to the facts of the case, it is clear from the mandate of section 36(1)(va) that the employees share in the relevant funds must be deposited before the due date under the respective Acts. If the audit report mentions the due date of payment and also the actual date of payment with specific reference in column no. 20(b) having heading: `Details of contributions received from employees for various funds as referred to in section 36(1)(va) , it is an apparent indication of the disallowance of expenditure u/s 36(1)(va) in the audit report in a case where the actual date of payment is beyond the due date. Though the audit report clearly indicated that there was a delay in the deposit of the employees share in the relevant funds, which was in contravention of the prescription of u/s.36(1)(va), the assessee chose not to offer the disallowance in computing the total income in the return, which rightly called for the disallowance in terms of section 143(1)(a) of the Act. 11. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge by the assessee throughout has been to the disallowance of expenditure made by the AO. It set up a case before the authorities below, including the ld. CIT(A), taking shelter of section 43B of the Act by arguing that the disallowance cannot be made because such payment was made before the due date u/s.139(1) of the Act. As such, the contention of adjustment u/s 143(1)(a)(iv) due to `increase in income is jettisoned. 12. Another argument point was put forth on behalf of the assessee that the assessee did not claim any deduction in the Profit and loss account of the amount under consideration and hence no disallowance should have been made. This argument is again bereft of force. The assessee claimed deduction for salary on gross basis, inclusive of the employees share to the relevant funds. To put it simply, if gross salary is of Rs.100, out of which a sum of Rs.10 has been deducted as contribution to relevant fund, then the debit of Rs.100 in the Profit and loss account means deduction has been claimed for Rs.10 as well. Ex consequenti, if deduction of Rs.10 is not allowed u/s 36(1)(va) for late deposit of the amount before the due date under the respective Act, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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