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TMI Blog2022 (12) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income u/s.143(1)(a)(ii) of the Act, an incorrect claim, if such incorrect claim is apparent from any information in the return of income is to be disallowed and such adjustment is to be made on the total income or loss to the assessee. We find not infirmity in the order of CIT(A) and that of the CPC and hence, the same are confirmed. This issue of assessee s appeal is dismissed. Action of AO denying the tax benefit / tax rates to be adopted while computing tax liability in term of Section 115BAA(5) - We noted that the assessee has already moved petition for condonation of delay in filing the return of income u/s.119(2)(b) of the Act dated 09.11.2022 before CBDT, New Delhi. Revenue can await decision of this petition and in the eventuality, the CBDT condones the delay, the assessee is liable to assess at a lower rate of tax in the given facts and circumstances of the case. Hence, we restore this issue back to the file of the AO to await and pursue the petition for condonation of delay filed by assessee before CBDT, New Delhi. The assessee will also pursue the same and we are confident that CBDT will take up this decision and will decide this issue at the earliest. In term of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A). The CIT(A) upheld the prime-facie adjustment made u/s.143(1) of the Act by the CPC, Bangalore by observing in para 7.9 as under:- 7.9 Therefore, in view of the remarks in the audit report, adjustments can be made in terms of section 143(1). This is also in the nature of incorrect claim which is apparent from the information contained in the tax audit report. Hence, I find that the adjustment is within the purview of section 143(1) of the Income Tax Act. The case laws cited by the assessee relating to adjustments u/s 143(1) of the Act were prior to the amendments to Section 143(1) and therefore quite distinguishable to the facts and circumstances of the assessee s case. 4. As regards to merits of the case, the CIT(A) confirmed the disallowance u/s.36(1)(va) of the Act and now before us the ld.counsel for the assessee could not make any argument when the decision of Hon ble Supreme Court in the case of Checkmate Services Pvt. Ltd., in Civil Appeal No.2833 of 2016, order dated 12.10.2022 was pointed out. We noted that the Hon ble Supreme Court in the case of Checkmate Services Pvt. Ltd., supra, has categorically held that the payments on account of employees contributions of PF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jun-19 KOLLAM 1,380 15-Jul-19 16-Oct-19 93 Jul-19 HO 10,026 15-Aug-19 15-Sep-20 397 Jul-19 HO 6,630 15-Aug-19 16-Oct-19 62 Jul-19 HO 2,836 15-Aug-19 18-Sep-19 34 Jul-19 HO 662 15-Aug-19 19-Oct-19 65 Jul-19 KOLLAM 1,380 15-Aug-19 13-Sep-19 29 Jul-19 KOLLAM 1,380 15-Aug-19 16-Oct-19 62 Aug-19 HO 697 15-Sep-19 11-Oct-19 26 Aug-19 HO 6,630 15-Sep-19 16-Oct-19 31 Aug-19 HO 697 15-Sep-19 19-Oct-19 34 Aug-19 HO 10,026 15-Sep-19 29-Sep-20 380 Sep-19 HO 1,086 15-Oct-19 13-Jan-20 90 Sep-19 KOLLAM 1,380 15-Oct-19 16-Oct-19 1 Oct-19 HO 332 15-Nov-19 13-Jan-20 59 Oct-19 HO 3,775 15-Nov-19 29-Sep-20 319 Nov-19 HO 1,134 15-Dec-19 13-Jan-20 29 Nov-19 HO 2,700 15-Dec-19 29-Sep-20 289 Dec-19 HO 3,775 15-Jan-20 30-Sep-20 259 Jan-20 HO 8,289 15-Feb-20 30-Sep-20 228 Feb-20 HO 3,960 15-Mar-20 30-Sep-20 199 Mar-20 HO 887 15-May-20 05-Oct-20 143 2,09,425 Employees State Insurance Month Place Employees contribution Due date for payment Actual date of payment No. of days delay Aug-19 HO 94 15-Sep-19 19-Sep-19 4 Aug-19 HO 366 15-Sep-19 20-Sep-19 5 Dec-19 HO 758 15-Jan-20 16-Jan-20 1 Dec-19 HO 2,190 15-Jan-20 21-Jan-20 6 Total 2,12,833 This is extracted from the audit report as filed by assessee along with re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roposed to clarify the meaning of the term an incorrect claim apparent from any information in the return . This term shall mean such claim on the basis of an entry, in the return,- (a) of an item, which is inconsistent with another entry of the same or some other item in such return; (b) in respect of which, information required to be furnished to substantiate such entry, has not been furnished under this Act; or (c) 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. Further, these adjustments will be made only in the course of computerized processing without any human interface. In other words, the software will be designed to detect arithmetical inaccuracies and internal inconsistencies and make appropriate adjustments in the computation of the total income. (emphasis supplied). For this purpose the Department is in the process of establishing a system for Centralized Processing of Returns. To facilitate this. it is also proposed that- (a) the Board may formulate a scheme with a view to expeditiously determine the tax payable by, or refund due to, the assessee, (b) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amendment provisions by the Finance Act, 2008 w.e.f. 01.04.2008, the amended provisions empowers adjustments to be made interalia on the basis of remarks indicated in the return of income or incorrect claim apparent from any information in the return of income. Post amendment w.e.f. 01.04.2008, the scope of adjustment u/s.143(1) of the Act has widened and enlarged. It provides that total income shall be computed after making adjustments inter-alia on account of incorrect claim, if such incorrect claim is apparent from any information in the return of income. In the present case before us, the adjustment u/s.143(1)(a) has been made on the basis of information contained in the tax audit report with respect to the belated payments of employees contribution of EPF and ESI paid beyond the due dates as prescribed under the respective Act and these various funds are referred in section 36(1)(va) of the Act. The information gives the details of due date of payment, actual date of payment to the concerned authorities and these payments have been made beyond the due dates specified in the respective acts i.e., Provident Fund Act ESI Act, which attracted the provisions of section 36(1)(v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iples of law it could have been treated only as receipts not amounting to income. When Parliament introduced the amendments in 1988-89, inserting Section 36(1)(va) and simultaneously inserting the second proviso of Section 43B, its intention was not to treat the disparate nature of the amounts, similarly. As discussed previously, the memorandum introducing the Finance Bill clearly stated that the provisions especially second proviso to Section 43B - was introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods. That Parliament intended to retain the separate character of these two amounts, is evident from the use of different language. Section 2(24)(x) too, deems amount received from the employees (whether the amount is received from the employee or by way of deduction authorized by the statute) as income - it is the character of the amount that is important, i.e., not income earned. Thus, amounts retained by the employer from out of the employee s income by way of deduction etc. were treated as income in the hands of the employer. The significance of this provision is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legal position is very clear that while processing return of income u/s.143(1)(a)(ii) of the Act, an incorrect claim, if such incorrect claim is apparent from any information in the return of income is to be disallowed and such adjustment is to be made on the total income or loss to the assessee. We find not infirmity in the order of CIT(A) and that of the CPC and hence, the same are confirmed. This issue of assessee s appeal is dismissed. 13. The next issue in this appeal of assessee is as regards to the order of CIT(A) in confirming the action of AO denying the tax benefit / tax rates to be adopted while computing tax liability in term of Section 115BAA(5) of the Act. 14. Brief facts are that the CPC, Bangalore while processing the return of income computed the tax liability and comparative chart as provided by the assessee and as computed by the CPC is as under:- Particulars As per Appellant As per CPC Total Income 2,10,99,67,200 2,11,01,80,030 Tax Liability after relief 53,06,51,890 73,54,23,071 Interest and fee payable 10,000 5,31,67,327 Total Liability 53,06,61,890 78,85,90,398 Total Taxes Paid (Advance Tax, TDS Self Assessment Tax) 53,30,75,986 53,30,65,748 Balance Tax P ..... X X X X Extracts X X X X X X X X Extracts X X X X
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