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TMI Blog2023 (2) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act viz. disallowance of expenditure indicated in the tax audit report stands satisfied and the Department is permitted to make disallowance in terms of section 143(1) of the Act. Debatable issues - Disallowance under section 143(1)(a) was valid in view of Supreme Court's decision in case of Checkmate Services (P.) Ltd. [ 2022 (10) TMI 617 - SUPREME COURT] and the assessee will not be entitled to deduction of belated payment of ESI and PF of employees' share of contribution as per provisions of section 36(1)(va) of the Act. Again, recently in the case of Cemetile Industries [ 2022 (12) TMI 354 - ITAT PUNE] held that where assessee-employer deposited amount of employees contribution towards employees' provident fund and employees' state insurance corporation beyond due date stipulated in respective Acts, disallowance made under section 36(1)(va) was justified. ITAT further held that adjustment under section 143(1)(a) by means of disallowance made for late deposit of employees' share to relevant funds beyond date prescribed under respective Acts was proper. Appeal of the assessee is dismissed. - SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER And SHRI B.M. BIYANI, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of doubts, it is hereby clarified that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purpose of determining the due date under this clause; Explanation 5. For the removal of doubts, it is hereby clarified that the provisions of this section shall not apply and shall be deemed never to have been applied to a sum received by the assesses from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 applies. (xii) Hence, there is no ambiguity in the provisions of section 36(1 )(va) and section 2(24)(x) of the Act, and the recent amendment after passing of the Finance Act 2021, has only clarified the issue that definition of due dates as per Sec 43B is deemed never to have been applied for the purpose of Employees Contribution. Therefore, the payment of employees contribution made after the due date, by which the appellant is required as an employer to credit an employee's contribution to the employees account in the relevant fund under Employees Provident Fund Scheme, is liable to be added to the income of appellant. (xiii) Therefore in view of the above discussion and the recent amendment b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date specified under sub-section (1) of section 139; (iv) disallowance of expenditure [or increase in income] indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under 69[section 10AA or under any of the provisions of Chapter VI-A under the heading C. Deductions in respect of certain incomes , if] the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: A perusal of section 143(1) of the Act shows that the words used are (iv) disallowance of expenditure indicated in the audit report 6.1 Therefore, there is no specific requirement under section 143(1) of the Act that the auditor has to make a specific observation regarding admissibility/inadmissibility with regard to any claim of expenditure and all that is required under section 143(1) of the Act is that disallowance of such expenditure should be indicated in the audit report . Now, on going through the specific clauses of the Tax Auditors Report in Form Number 3CD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loyee's contribution on or before due date as a condition for deduction. The Supreme Court observed that there is a marked difference between nature and character of assessee-employer's contribution and amounts retained by assessee from out of employee's income by way of deduction wherein one is liability to be paid by employer and second is deemed income as per section 2(24)(x) which is held in trust by assessee-employer, thus, said marked difference was to be borne while interpreting obligation of assessee- employer under section 43B of the Act. The Hon'ble Supreme held that the non obstante clause under section 43B could not apply in case of amounts which were held in trust as was case of employee's contribution which were deducted from their income and was not part of assessee-employer's income, thus, said clause would not absolve assessee-employer from its liability to deposit employee's contribution on or before due date as a condition for deduction. Again the Supreme Court in the case of Harrisons Malayalam Ltd. [2022] 145 taxmann.com 608 (SC), dismissed the SLP of the Assessee against order of High Court that where assessee-company failed to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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