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TMI Blog2023 (9) TMI 1678X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3. For the sake of reference, we are referring to the facts and figures of AY 2018-19. The grounds of appeal taken by the assessee in Assessment Year 2018-19 read as under :- "1. That on the facts and in the circumstances of the case the order of Ld. CIT(Appeal) National Faceless Appeal Centre, Delhi is bad in law & on facts, as the matter of late deposit of ESI/EPF of employee share was debatable in view of various High Court judgements, therefore no prima facie addition can be made u/s 143(1)(a)(iv). 2. That the order of Ld. CIT(A) National Faceless Assessment Centre, Delhi is bad in law & violative of principles of natural justice as no opportunity of being heard in person was provided to the assessee during appellate proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s amount of Rs.35,88,973/-, which is any sum received from employees as contribution to any provident fund or any fund set up under ESI Act or any other fund for the welfare of employees to the extent not credited to the employees account on or before the due date. Therefore, the CPC disallowed this amount and added to the total income of the assessee. 5. Upon assessee's appeal, ld. CIT (A), after considering the submissions of the assessee and placing reliance on the decision of Hon'ble Supreme Court in the case of Checkmate Service P. Ltd. vs. CIT in Civil Appeal No.2833 of 2016 order dated 12.10.2022, upheld the action of the AO. We may gainfully refer the order of the ld. CIT (A) as under :- " I have carefully gone through the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mary liability under law - in terms of Section 36(1 )(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1 )(va)) is, thus crucial. The former forms part of the employers' income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) - unless the conditions spelt by Explanation to Section 36(1 )(va) are satisfied i.e., depositing such 33 amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the two amounts - the employer's liability is to be paid out of its income whereas the second is deemed an income, by definition, since it is the deduction from the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such 34 interpretation were to be adopted, the non-obstante clause under Section 436 or anything contained in that provision would not absolve the assessee from its liability to deposit the employee's contribution on or before the due date as a condition for deduction. 55. In the light of the above reasoning, this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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