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TMI Blog2024 (6) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... 6(1)(va). The former part is the employers income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) and therefore, subjected to conditions spelt out by Explanation to Section 36(1)(va) i.e., depositing such amount received or deducted from the employee on or before the due date. This marked distinction has been clarified while interpreting the obligation of every assessee under Section 43B. If the same is not deposited as per mandate of Sec.36(1)(va), the deduction of the same would not be available to the assessee. Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... SI amounting to Rs. 40,91,370/-. During the processing of the return, the entire amount was disallowed and added back with total income which was mentioned in the Tax Audit Report on account of disallowance u/s 36(1)(va) read with Section 2(24)(x) of the Act for delayed payments towards employees' contribution to PF&ESI. The employees' contribution to PF&ESI was made before due date of filing return of income but after the due date of the mentioned in the specific Act. 5. Being aggrieved, the assessee filed an appeal before ld. CIT(A) with a delay. The assessee filed a condonation petition and there was sufficient cause for delay in filing the appeal. Accordingly, the delay is condoned by the ld. CIT(A). But after considering the submission of the assessee, ld. CIT(A) had passed a speaking order and upheld the assessment order. Being aggrieved, assessee filed an appeal before us. 6. Ld. D/R vehemently argued and invited our attention to page no. 9-12 of the appeal order which is reproduced as below: "The language of newly proposed explanation 2 to section 36(1)(va) and explanation 5 to section 43B makes it clear that the amendment is retrospective. Recently Apex Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional expenditure under various heads along with conditions to be met. It is, therefore, necessary to bear in mind that specific enumeration of deductions, dependent upon fulfilment of particular conditions, would qualify as allowable deductions whereas taxpayer's failure to comply with those conditions would render the claim vulnerable to rejection. ► In the light of the above scheme of the ITL, the provisions of Section 36(1)(va) have remained unaltered since the inception from 1987 whereas provisions of Section 43B have undergone changes from time to time. There is significant difference between nature of contributions covered by S.36(1)(va) and S.43B and conditions for deduction thereof. ► By inserting Section 36(1)(va) and amending definition of "income", the Parliament intended that amounts not earned by the taxpayer, but received by it - whether in the form of deductions or otherwise, as receipts, were to be treated as income. Since these receipts did not belong to taxpayer but were held by them as trustees, Section 36(1)(va) was inserted to ensure that if these receipts are deposited in the relevant SSS on or before the "due date", they could be tre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling is of Three-Judge Bench while the earlier Alom Extrusions ruling was of Two-Judge Bench, the present ruling will supersede any contrary observations in the earlier ruling. The present SC ruling highlights the distinction in the nature and tax treatment of employer's contributions and employees' contributions to SSS having regard to the legislative development. It upholds strict interpretation of taxing law. The case laws mentioned by the assessee in their appeal has no force as they has been superseded by the amendment made in Finance Act, 2021 and the decision of Apex Court in the case of Checkmate Services P. Ltd. (Taxpayer) v. CIT [TS-791-SC-2022], In the instant case, the appellant has failed to deposit entire amount towards employees' contribution on account of PF and ESI on or before prescribed due date. Therefore, the appellant is not entitled to deduction u/s 36(1)(va) of the Act. Accordingly, the appeal is dismissed on merits." 7. Ld. D/R specifically mentioned that the issue is covered by the decision of the Hon'ble Supreme Court in the case of Checkmate Services Pvt. Ltd. (supra). Accordingly, the entire amount will be disallowed. 8. We heard the rival sub ..... X X X X Extracts X X X X X X X X Extracts X X X X
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