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TMI Blog2023 (8) TMI 1618X X X X Extracts X X X X X X X X Extracts X X X X ..... resident And Shri Manjunatha. G, Hon'ble Accountant Member For the Appellant : Mr. H. Yeshwanth Kumar, CA. For the Respondent : Mr. P. Sajit Kumar, JCIT. ORDER PER MANJUNATHA.G, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre (NFAC), Delhi, dated 06.03.2023, and pertains to assessment year 2018-19. 2. The assessee has raised the following grounds of appeal: 1. For that the order of Commissioner of Income Tax (Appeals) is contrary to law, facts and circumstances of the case to the extent prejudicial to the interest of the appellant and at any rate is opposed to the principles of equity, natural justice and fair play. 2. For that the Commissioner of Income Tax (Appeals) failed to appreciate that the intimation u/s. 143(1) passed by the Assistant Director of Income Tax, Centralized Processing Center, Bengaluru (ADIT, CPC) is without jurisdiction. 3. For that the Commissioner of Income Tax (Appeals) without affording an opportunity of being heard erred in dismissing the appeal as infructuous. 4. For that the Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the issue is covered against the assessee by the decision of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. v. CIT (Civil Appeal No. 2833 of 2016 dated 12.10.2022). However, referring to the findings of the Ld.CIT (A) in Para No. 1.6 of order dated 06.03.2023 submits that the facts recorded by the Ld.CIT (A) in their order is altogether different which is evident from the fact that the Ld.CIT (A) refers to AY 2017-18 whereas the issue involved in the present appeal is AY 2018-19. Therefore, he submits that de hors the findings of the Ld.CIT(A), the issue may be decided in accordance with decision of the Hon'ble Supreme Court in the case of Checkmate Services P. Ltd. v. CIT (Civil Appeal No. 2833 of 2016 dated 12.10.2022). 5. The Ld.DR, Mr. P. Sajit Kumar, JCIT, supporting the order of the AO, submitted that the issue is squarely covered in favour of the Revenue in the case of Checkmate Services P. Ltd. v. CIT (supra), and thus, appeal filed by the assessee should be dismissed. 6. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The Hon'ble Supreme Court in the case of Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 return of income and particularly clause No. 20(b). The details are completely provided by assessee. 8. Now, the question arises whether in view of the provisions of section 143(1)(a) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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) the Central Government may issue a notification in the Official Gazette, directing that any of the provisions of this Act relating to processing of retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ralia 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)(va) r.w.s. 2(24)(x) of the Act leading to disallowance of this sum to the extent not paid on or before the due date stipulated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endments 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 that on the one hand it brought into the fold of "income" amounts that were receipts or deductions from employee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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