M/S G.L.CONSTRUCTION PVT LTD, MUMBAI V. ACIT/NATIONAL FACE LESS APPEAL CENTRE, MUMBAI

ITA 2846/MUM/2022

AI Insights

M/s G.L. Construction Pvt. Ltd. appealed against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which confirmed the addition of Rs.12,71,218 under section 36(1)(va) of the Income Tax Act for delay in deposit of employees' contributions to ESI and PF. The Tribunal admitted an additional ground concerning the CPC's authority to make such disallowances under section 143(1)(a)(iv). The Tribunal dismissed the additional ground, citing the Supreme Court's decision in Checkmet Services Pvt. Ltd. v. CIT, which allowed such disallowances as prima facie adjustments. However, the Tribunal restored the issue of disallowance of professional tax to the Assessing Officer for verification.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123623 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2023
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: G
• Next Hearing Date: 15-02-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 08-11-2022
• Other Referred Cases: National Thermal Power Company Ltd. v. CIT, Checkmet Services Pvt. Ltd. v. CIT, PR Packaging Services v. CIT, Nissan Enterprises Ltd. v. DCIT CPC
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Keywords: Business expenditure; FORM 26AS
• Section: 37; 28; 2; 43B; 139; 10AA; 143(1); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) ITA No. 2846/MUM/2022 Assessment Year: 2019-20 M/s G.L. Construction Pvt. Ltd, 304, Gokul Arcade B, Subhash Road, Near Garware, Vile Parle East, Mumbai-400057. Vs. ACIT/National Faceless Appeal Centre, 5 th floor, Aayakar Bhavan, Churchgate, Mumbai-400020. PAN No. AAACG 3438 P Appellant Respondent Assessee by : Mr. N.R. Agrawal, AR Revenue by : Smt. Sonia Kumar, DR Date of Hearing : 16/02/2023 Date of pronouncement : 23/02/2023 ORDER PER OM PRAKASH KANT, AM This appeal has been preferred by the assessee against order dated 26.07.2021 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre (NFAC), Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2019-20, raising sole ground as under: The Ld. CIT(A) erred in confirming the addition of Rs.12,71,218/- u/s 36(1)(va) for delay in deposit of Employees Contribution Rs.9,47,090/ tax deducted salary. 2. During the course of the hearing, the assessee filed an additional ground and submitted view of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT 229 ITR 389 (SC). The said additional ground is reproduced as under: The Ld. AO/CPC erred in making addition of Rs.12,71,218/ u/s 36(1)(va) of the Act while passing order u/s 143(1) when there was no specific power given to CPC to make adjustment in return filed by assessee. By mistake & oversight, this ground of appeal was not taken while filling appeal. While passing the order u/s 250, CIT(A) wrongly relied on section 143(1)(a)(iv) (para no. 3.3., page No. 11 of the CIT(A) order). 3. We have heard rival submission of the parties the admission of the additional ground. The Additional ground being purely legal in nature and not requiring investigation of the fresh facts, therefore decision of the Hon’ble Supreme Court in (supra). 4. Briefly stated, facts of the case are that the assessee filed return of income in prescribed form containing made toward employees contribution to (ESI) and Provident Fund (PF) a M/s G.L. Construction Pvt. Ltd. Contribution Rs.9,47,090/- & Rs.324125/- being professional tax deducted salary. During the course of the hearing, the assessee filed an additional ground and submitted that same might be admitted in view of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT 229 ITR 389 (SC). The ditional ground is reproduced as under: The Ld. AO/CPC erred in making addition of Rs.12,71,218/ u/s 36(1)(va) of the Act while passing order u/s 143(1) when there was no specific power given to CPC to make adjustment in return filed by assessee. ake & oversight, this ground of appeal was not taken while filling appeal. While passing the order u/s 250, CIT(A) wrongly relied on section 143(1)(a)(iv) (para no. 3.3., page No. 11 of the CIT(A) We have heard rival submission of the parties the admission of the additional ground. The Additional ground being purely legal in nature and not requiring investigation of the therefore, same is admitted for adjudication decision of the Hon’ble Supreme Court in the case of NTPC Ltd. Briefly stated, facts of the case are that the assessee filed in prescribed form containing details of payment made toward employees contribution to Employee State Insurance (ESI) and Provident Fund (PF) after the due date prescribed under M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 2 AY 2019-20 being professional During the course of the hearing, the assessee filed an same might be admitted in view of the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. v. CIT 229 ITR 389 (SC). The The Ld. AO/CPC erred in making addition of Rs.12,71,218/- u/s 36(1)(va) of the Act while passing order u/s 143(1) when there was no specific power given to CPC to make adjustment ake & oversight, this ground of appeal was not taken While passing the order u/s 250, CIT(A) wrongly relied on section 143(1)(a)(iv) (para no. 3.3., page No. 11 of the CIT(A) We have heard rival submission of the parties on the issue of the admission of the additional ground. The Additional ground being purely legal in nature and not requiring investigation of the for adjudication in view of the case of NTPC Ltd. Briefly stated, facts of the case are that the assessee filed details of payment Employee State Insurance fter the due date prescribed under the relevant laws. While Centralized Processing Centre (CPC), paid after due date of relevant laws provisions of section 36(1 by the CPC and terms of section 143(1)(a) of the disallowance was made invoking the provisions of s 143(1)(a)(iv) of the Act, assessee, in the return o 5. On further appeal, the Ld. CIT(A) upheld the action of the CPC for making disallowance of Rs.12,71,250/ invoking section 143(1)(a)(iv) of the Act. The Ld. CIT(A) also on merit held that said payment of the employees was not even permissib finding of the Ld. CIT(A) is reproduced as under : “3. The only ground of appeal of the present appeal is against the order uls. 143(1) dated 07.07.2020 for A.Y. 2019 whereby a disallowance of Rs 12,71,250/ us.36(1)(va) for failure of the appellant to pay the employees' contribution to the relevant Acts by the AO CPC ITR. 3.1 However, it is the contention of the ap amount has been paid before the due date for filing of return of income us. 139(1), the same ought to be allowed as a deduction as per the case laws cited. 3.2 From the facts on record, it is evident that the disallowance of Rs. 12,71,250/ basis of details reported in Tax Audit Report for the relevant period. M/s G.L. Construction Pvt. Ltd. While processing of the return of income by the Processing Centre (CPC), the said amount of ESI/PF paid after due date of relevant laws, was disallowed provisions of section 36(1)(va) of the Act. This processing was done by the CPC and terms of section 143(1)(a) of the disallowance was made invoking the provisions of s 143(1)(a)(iv) of the Act, on the basis of the facts furnished by the , in the return of income. On further appeal, the Ld. CIT(A) upheld the action of the CPC for making disallowance of Rs.12,71,250/- u/s 36(1)(va) of the Act invoking section 143(1)(a)(iv) of the Act. The Ld. CIT(A) also on merit held that said payment of the employees contribution to ESI/PF was not even permissible u/s 36(1)(va) of the Act. The relevant finding of the Ld. CIT(A) is reproduced as under : 3. The only ground of appeal of the present appeal is against the order uls. 143(1) dated 07.07.2020 for A.Y. 2019 whereby a disallowance of Rs 12,71,250/- us.36(1)(va) for failure of the appellant to pay the employees' contribution to PF/ESI before the prescribed due dates under the relevant Acts by the AO CPC ITR. However, it is the contention of the appellant that since the amount has been paid before the due date for filing of return of income us. 139(1), the same ought to be allowed as a deduction as per the case laws cited. From the facts on record, it is evident that the disallowance 1,250/-has been made us 36(1)(va) of the Act on the basis of details reported in Tax Audit Report for the relevant M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 3 AY 2019-20 processing of the return of income by the he said amount of ESI/PF was disallowed, in view of processing was done by the CPC and terms of section 143(1)(a) of the Act and said disallowance was made invoking the provisions of section n the basis of the facts furnished by the On further appeal, the Ld. CIT(A) upheld the action of the CPC u/s 36(1)(va) of the Act invoking section 143(1)(a)(iv) of the Act. The Ld. CIT(A) also on merit contribution to ESI/PF 6(1)(va) of the Act. The relevant 3. The only ground of appeal of the present appeal is against the order uls. 143(1) dated 07.07.2020 for A.Y. 2019-20 - was made us.36(1)(va) for failure of the appellant to pay the employees' PF/ESI before the prescribed due dates under pellant that since the amount has been paid before the due date for filing of return of income us. 139(1), the same ought to be allowed as a deduction From the facts on record, it is evident that the disallowance has been made us 36(1)(va) of the Act on the basis of details reported in Tax Audit Report for the relevant 3.3. Since these amounts were not disallowed in the Return of income filed by the appellant in IT , the variance between Tax Audit Report and ITR has been duly flagged by the CPC in the computerized processing and disallowed u/s. 143(1)(a)(iv) of the Act on the basis of facts furnished by the appellant for audit. Therefore, the adjustments carried out were well within the ambit of the p as follows "Assessment. 143. (1) Where a return has been made under section 139, or in response to a notice return shall be processed in the following (a) the total income or loss shall be computed after making the following adjustments, (i) any arithmetical error in the retum: /*) (i) an incorrect claim, if such incorrect claim is apparent from any information in the (ii) disallowance of loss of the previous year for which set off of loss is claimed was furnished beyond the due date specified under subsection 44) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in comput return:" 3.4. The indication of disallowance u/s 36(1)(va) is thus embedded in the details given in Tax Audit Report in clause 20(b) of Form No.3CD, i.e., due dates as prescribed u/s.36(1)(va) and the actual dates of payment rep clearly indicating the deviations if any which attract such disallowance, on the books of accounts and other evidences furnished by the appellant before the Audit. 3.5 Since the delay in such payment of employees contribution to PF/ESI beyond t clearly falls within the ambit of prima facie adjustments to be carried out us. 143(1)(a)(iv), the disallowance made by CPC us. 143(1) on this issue is found to be in order. M/s G.L. Construction Pvt. Ltd. 3.3. Since these amounts were not disallowed in the Return of income filed by the appellant in IT , the variance between Tax port and ITR has been duly flagged by the CPC in the computerized processing and disallowed u/s. 143(1)(a)(iv) of the Act on the basis of facts furnished by the appellant for audit. Therefore, the adjustments carried out were well within the ambit of the provisions of section 143(1)(a)(iv) which reads "Assessment. 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely (a) the total income or loss shall be computed after making the following adjustments, namely; (i) any arithmetical error in the retum: /*) (i) an incorrect claim, if such incorrect claim is apparent from any information in the (ii) disallowance of loss claimed, if retum of the previous year for which set off of loss is claimed was furnished beyond the due date specified under subsection 44) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the 3.4. The indication of disallowance u/s 36(1)(va) is thus embedded in the details given in Tax Audit Report in clause 20(b) of Form No.3CD, i.e., due dates as prescribed u/s.36(1)(va) and the actual dates of payment rep clearly indicating the deviations if any which attract such disallowance, on the books of accounts and other evidences furnished by the appellant before the Audit. Since the delay in such payment of employees contribution to PF/ESI beyond the due dates as prescribed us.36(1)(va) clearly falls within the ambit of prima facie adjustments to be carried out us. 143(1)(a)(iv), the disallowance made by CPC us. 143(1) on this issue is found to be in order. M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 4 AY 2019-20 3.3. Since these amounts were not disallowed in the Return of income filed by the appellant in IT , the variance between Tax port and ITR has been duly flagged by the CPC in the computerized processing and disallowed u/s. 143(1)(a)(iv) of the Act on the basis of facts furnished by the appellant for audit. Therefore, the adjustments carried out were well within rovisions of section 143(1)(a)(iv) which reads 143. (1) Where a return has been made under section 139, or in section (1) of section 142, such manner, namely: (a) the total income or loss shall be computed after making the (i) an incorrect claim, if such incorrect claim is apparent from claimed, if retum of the previous year for which set off of loss is claimed was furnished beyond the due date specified under subsection 44) (iv) disallowance of expenditure indicated in the audit report ing the total income in the 3.4. The indication of disallowance u/s 36(1)(va) is thus embedded in the details given in Tax Audit Report in clause 20(b) of Form No.3CD, i.e., due dates as prescribed u/s.36(1)(va) and the actual dates of payment reported, thus clearly indicating the deviations if any which attract such disallowance, on the books of accounts and other evidences Since the delay in such payment of employees contribution he due dates as prescribed us.36(1)(va) clearly falls within the ambit of prima facie adjustments to be carried out us. 143(1)(a)(iv), the disallowance made by CPC us. 4. On the legal issues and the contention such disallowance of late payment of SI/PF u/s.36(1)(va) is not permissible and that it ought to have been allowed on payment basis u/s.43B at par with employers' contribution to PF/ESI in view of the judicial pronouncements relied o decided as follows after a careful consideration of the facts of the case and the position of law on the issue. 4.1. Employee Provident Fund and Miscellaneous Provisions Act, 1952 was promulgated to provide for the institution of provident funds, pension fund and deposit fund for employees in factories and other establishments. It aims to build a sufficient retirement corpus for an individual by inculcating the habit of saving money for the salaried class employee. The fund employer and employee, calculated in the prescribed manner under the relevant Act. As per Employees' Provident Fund Scheme, 1952, the contribution towards provident fund has to be made within fifteen days of close 4.2. The employer is under statutory obligation to deduct the employees' contribution from the salary/wages etc. payable to an employee and this deduction is to be made every month and deposited on or before 15th of the succeeding month in specified fund, irrespective of whether the salary, wages etc. have been actually paid or not. Therefore, the amount deducted from the employees is held in a fiduciary capacity by the employer and has to be deposited within the prescribed due date under the respective welfare fund schemes. Therefore, it is first treated as income in the hands of the employer in computing his profits and gains of business and profession under Income Tax Act and is allowed as a business deduction only if it has been paid 4.3. The employer's contribution, on the other hand, is a statutory obligation on the part of the employer to contribute from his own funds to the retirement corpus of the employees and is therefore in the nature of a direct busi per se. Thus, by very nature, these two components, i.e., the employees' contribution and employer's contribution stand on totally different footings and hence covered under different provisions of the Income Tax Act. 1961 M/s G.L. Construction Pvt. Ltd. 4. On the legal issues and the contention of the appellant that such disallowance of late payment of SI/PF u/s.36(1)(va) is not permissible and that it ought to have been allowed on payment basis u/s.43B at par with employers' contribution to PF/ESI in view of the judicial pronouncements relied on, the issue is decided as follows after a careful consideration of the facts of the case and the position of law on the issue. 4.1. Employee Provident Fund and Miscellaneous Provisions Act, 1952 was promulgated to provide for the institution of funds, pension fund and deposit-linked insurance fund for employees in factories and other establishments. It aims to build a sufficient retirement corpus for an individual by inculcating the habit of saving money for the salaried class employee. The fund includes monetary contributions from both employer and employee, calculated in the prescribed manner under the relevant Act. As per Employees' Provident Fund Scheme, 1952, the contribution towards provident fund has to be made within fifteen days of close of every month. 4.2. The employer is under statutory obligation to deduct the employees' contribution from the salary/wages etc. payable to an employee and this deduction is to be made every month and deposited on or before 15th of the succeeding month in specified fund, irrespective of whether the salary, wages etc. have been actually paid or not. Therefore, the amount deducted from the employees is held in a fiduciary capacity by the employer and has to be deposited within the prescribed due r the respective welfare fund schemes. Therefore, it is first treated as income in the hands of the employer in computing his profits and gains of business and profession under Income Tax Act and is allowed as a business deduction only if it has been paid within prescribed due date 4.3. The employer's contribution, on the other hand, is a statutory obligation on the part of the employer to contribute from his own funds to the retirement corpus of the employees and is therefore in the nature of a direct business expenditure Thus, by very nature, these two components, i.e., the employees' contribution and employer's contribution stand on totally different footings and hence covered under different provisions of the Income Tax Act. 1961 M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 5 AY 2019-20 of the appellant that such disallowance of late payment of SI/PF u/s.36(1)(va) is not permissible and that it ought to have been allowed on payment basis u/s.43B at par with employers' contribution to PF/ESI in n, the issue is decided as follows after a careful consideration of the facts of 4.1. Employee Provident Fund and Miscellaneous Provisions Act, 1952 was promulgated to provide for the institution of linked insurance fund for employees in factories and other establishments. It aims to build a sufficient retirement corpus for an individual by inculcating the habit of saving money for the salaried class contributions from both employer and employee, calculated in the prescribed manner under the relevant Act. As per Employees' Provident Fund Scheme, 1952, the contribution towards provident fund has to of every month. 4.2. The employer is under statutory obligation to deduct the employees' contribution from the salary/wages etc. payable to an employee and this deduction is to be made every month and deposited on or before 15th of the succeeding month in the specified fund, irrespective of whether the salary, wages etc. have been actually paid or not. Therefore, the amount deducted from the employees is held in a fiduciary capacity by the employer and has to be deposited within the prescribed due r the respective welfare fund schemes. Therefore, it is first treated as income in the hands of the employer in computing his profits and gains of business and profession under Income Tax Act and is allowed as a business deduction within prescribed due date 4.3. The employer's contribution, on the other hand, is a statutory obligation on the part of the employer to contribute from his own funds to the retirement corpus of the employees ness expenditure Thus, by very nature, these two components, i.e., the employees' contribution and employer's contribution stand on totally different footings and hence covered under different 4.4. Under the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees is first treated a assessee-employer as per sub section 2, which reads as under “Definition 2. In this Act, unless the context otherwise requires (24) “income” includes (x) any sum received by the assessee from contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees;" 4.5. The employees' contrib "income" of the Employer u/s.2(24)(x), is allowed as a "Deduction" under section 36 of the Income Tax Act, 1961 while computing the income under the head 'Profits and gains of business or profession' only if it has been deposit Employer within the due dates prescribed under the relevant Acts or Funds. Clause (va) of Sub provides for such deduction reads as under: "Other deductions. 36. (1) The deductions provided for in the following clause shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28 received by the assessee from any of his employees to which the provisions of sub if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation. means the date by which the assessee is required as an employer to credit account in the relevant fund under any Act, rule. order or M/s G.L. Construction Pvt. Ltd. 4.4. Under the Income Tax Act, 1961, any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees is first treated as "Income" in the hands of the employer as per sub-clause (x) of Clause (24) of section 2, which reads as under In this Act, unless the context otherwise requires (24) “income” includes - (x) any sum received by the assessee from his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees;" 4.5. The employees' contribution which is so treated as "income" of the Employer u/s.2(24)(x), is allowed as a "Deduction" under section 36 of the Income Tax Act, 1961 while computing the income under the head 'Profits and gains of business or profession' only if it has been deposit Employer within the due dates prescribed under the relevant Acts or Funds. Clause (va) of Sub-section 1 of Section 36 which provides for such deduction reads as under: "Other deductions. 36. (1) The deductions provided for in the following clause shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28 received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation. - For the purposes of this clause, "due date" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule. order or M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 6 AY 2019-20 Income Tax Act, 1961, any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such s "Income" in the hands of the clause (x) of Clause (24) of In this Act, unless the context otherwise requires his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the ution which is so treated as "income" of the Employer u/s.2(24)(x), is allowed as a "Deduction" under section 36 of the Income Tax Act, 1961 while computing the income under the head 'Profits and gains of business or profession' only if it has been deposited by the Employer within the due dates prescribed under the relevant section 1 of Section 36 which 36. (1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in (va) any sum received by the assessee from any of his employees to which clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. For the purposes of this clause, "due date" means the date by which the assessee is required as an an employee's contribution to the employee's account in the relevant fund under any Act, rule. order or notification issued there award, contract of service or otherwise;" 4.6. Thus, the provisions regarding the deduction employees' contribution of PF/ESI in the hands of the employer us.36 are very clear. When it is specifically covered under section 36(1)(va), it cannot be considered under any other provisions of the Act including section 37 or section 43B, as evident from the following 4.7. As far as the Employer's own contribution is concerned, though it is abusiness expenditure, its allowability for the purposes of computing taxable income is subject to certain rigours of actual payment. Since the purpose of th obligation cast on the employer is to provide for a corpus fund on retirement of the employees, mere creation of that liability and providing for it by way of book entries is not enough and its actual payment is essential. It is towards this o the employer's contribution is brought under the ambit of section 43B which allows certain deductions only on actual payment basis only. 4.8. Section 43B specifies the list of deductions that are admissible under the Income Tax Act, 1961 only actual payment. Employer's contribution to PF/ESI is covered in clause (b) of section 43B. According to it, if any sum towards employer's contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees is actually paid by the assessee on or before the due date for furnishing the return of the income under sub-section (1) of section 139, assessee would be entitled to deduction under section 43B and such deduction would be admissible fo is deferred to the next accounting year, the employer can still claim the same as an eligible business deduction of the year if it was paid on or before the due date for filing of income us. 139(1). 4.9. This provision us.43B does not cover employees' contribution referred to in clause (va) of sub section 36 of the Act, as evident from a bare reading of the sections. M/s G.L. Construction Pvt. Ltd. notification issued there-under or under any standing order, award, contract of service or otherwise;" 4.6. Thus, the provisions regarding the deduction employees' contribution of PF/ESI in the hands of the employer us.36 are very clear. When it is specifically covered under section 36(1)(va), it cannot be considered under any other provisions of the Act including section 37 or section 43B, as dent from the following 4.7. As far as the Employer's own contribution is concerned, though it is abusiness expenditure, its allowability for the purposes of computing taxable income is subject to certain rigours of actual payment. Since the purpose of th obligation cast on the employer is to provide for a corpus fund on retirement of the employees, mere creation of that liability and providing for it by way of book entries is not enough and its actual payment is essential. It is towards this o the employer's contribution is brought under the ambit of section 43B which allows certain deductions only on actual payment basis only. 4.8. Section 43B specifies the list of deductions that are admissible under the Income Tax Act, 1961 only actual payment. Employer's contribution to PF/ESI is covered in clause (b) of section 43B. According to it, if any sum towards employer's contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the re of the employees is actually paid by the assessee on or before the due date for furnishing the return of the income section (1) of section 139, assessee would be entitled to deduction under section 43B and such deduction would be admissible for the accounting year. Thus, even if the payment is deferred to the next accounting year, the employer can still claim the same as an eligible business deduction of the year if it was paid on or before the due date for filing of income us. s provision us.43B does not cover employees' contribution referred to in clause (va) of sub-section (1) of section 36 of the Act, as evident from a bare reading of the M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 7 AY 2019-20 under or under any standing order, 4.6. Thus, the provisions regarding the deduction towards employees' contribution of PF/ESI in the hands of the employer us.36 are very clear. When it is specifically covered under section 36(1)(va), it cannot be considered under any other provisions of the Act including section 37 or section 43B, as 4.7. As far as the Employer's own contribution is concerned, though it is abusiness expenditure, its allowability for the purposes of computing taxable income is subject to certain rigours of actual payment. Since the purpose of this statutory obligation cast on the employer is to provide for a corpus fund on retirement of the employees, mere creation of that liability and providing for it by way of book entries is not enough and its actual payment is essential. It is towards this objective that the employer's contribution is brought under the ambit of section 43B which allows certain deductions only on actual 4.8. Section 43B specifies the list of deductions that are admissible under the Income Tax Act, 1961 only upon their actual payment. Employer's contribution to PF/ESI is covered in clause (b) of section 43B. According to it, if any sum towards employer's contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the re of the employees is actually paid by the assessee on or before the due date for furnishing the return of the income section (1) of section 139, assessee would be entitled to deduction under section 43B and such deduction would be r the accounting year. Thus, even if the payment is deferred to the next accounting year, the employer can still claim the same as an eligible business deduction of the year if it was paid on or before the due date for filing of income us. s provision us.43B does not cover employees' -section (1) of section 36 of the Act, as evident from a bare reading of the "Certain deductions to be only on actual payment. 43B. Notwithstanding anythin provision of this Act, a deduction otherwise allowable under this Act in respect of 1. any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or (b) any sum payable by the assessee as an emplover by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing conta relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for fumishing the retum of income under sub of the previous year in which incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. 4.10. The provisions of section 43B have undergone changes from time to time and were subject of judicial interpre well. Section 43B was inserted by Finance Act, 1983, with effect from 1 deductions claimed merely by making a book entry based on mercantile system of accounting and allow deduction on payment under Cash the assessee as an employer and not as a concession or beneficial or benevolent provision. 4.11. Vide Finance Act 1987, first proviso to Section 43B was inserted, whereby the conditions for allowing payment of it referred to in clause (a), i.e., if tax, duty, cess or fee referred in clause were relaxed and these sums were allowed as M/s G.L. Construction Pvt. Ltd. "Certain deductions to be only on actual payment. 43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of 1. any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time being in force, or sum payable by the assessee as an emplover by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or shall be allowed (irrespective of the previous year in which the o pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for fumishing the retum of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. 4.10. The provisions of section 43B have undergone changes from time to time and were subject of judicial interpre well. Section 43B was inserted by Finance Act, 1983, with effect from 1-4-1984, whose sole object was to disallow deductions claimed merely by making a book entry based on mercantile system of accounting and allow deduction on payment under Cash Basis. This was in the form of a rigour on the assessee as an employer and not as a concession or beneficial or benevolent provision. 4.11. Vide Finance Act 1987, first proviso to Section 43B was inserted, whereby the conditions for allowing payment of it referred to in clause (a), i.e., if tax, duty, cess or fee referred in clause were relaxed and these sums were allowed as M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 8 AY 2019-20 "Certain deductions to be only on actual payment. g contained in any other provision of this Act, a deduction otherwise allowable under 1. any sum payable by the assessee by way of tax, duty, cess or fee, by whatever name called, under any law for the time sum payable by the assessee as an emplover by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or shall be allowed (irrespective of the previous year in which the o pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: ined in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for fumishing the section (1) of section 139 in respect the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. 4.10. The provisions of section 43B have undergone changes from time to time and were subject of judicial interpretations as well. Section 43B was inserted by Finance Act, 1983, with 1984, whose sole object was to disallow deductions claimed merely by making a book entry based on mercantile system of accounting and allow deduction on Basis. This was in the form of a rigour on the assessee as an employer and not as a concession or 4.11. Vide Finance Act 1987, first proviso to Section 43B was inserted, whereby the conditions for allowing payment of items referred to in clause (a), i.e., if tax, duty, cess or fee referred in clause were relaxed and these sums were allowed as deduction for the same accounting year if paid after the closing of accounting year but before due date of filling of Return of Income under the Income Tax Act, 1961. relaxations of first proviso did not apply to employer's contribution to labour welfare funds such as PF/ESI etc referred to in clause (b) of 43B. The reason was that employer should not sit on collected co deprive the workmen of the rightful benefits under social welfare legislations by delaying payment of contributions to welfare funds. Thus, though the emplover's contribution in clause (b) was included in section 43B alongside t like tax, duty, cess or fee as referred to in clause (a) thereof, there were more stringent conditions for allowing the employer's contribution as compared to those items covered in clause 4.12. This differential treatment of employer's contrib vis tax, duty, cess or fee referred to in section 43B was further made abundantly clear vide Finance Act 1988, by the insertion of second proviso to Section 43B. It put the onus on the employer to pay his contribution on or before the due dates specified under the respective welfare funds, as evident from the unambiguous language of second proviso to Section 43B which read as under: *Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless suc actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36." 4.13. Later on, the second proviso was further amended vide Finance Act 1989 which did not re obligation under section 43B but only provided for the time taken for realisation of payment of PF/ESI by modes other than cash as under: Provided further that no deduction shall, in respect of any sum referred to in clause ( actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of sub M/s G.L. Construction Pvt. Ltd. deduction for the same accounting year if paid after the closing of accounting year but before due date of filling of Return of come under the Income Tax Act, 1961. However, the relaxations of first proviso did not apply to employer's contribution to labour welfare funds such as PF/ESI etc referred to in clause (b) of 43B. The reason was that employer should not sit on collected contribution of employees and deprive the workmen of the rightful benefits under social welfare legislations by delaying payment of contributions to welfare funds. Thus, though the emplover's contribution in clause (b) was included in section 43B alongside t like tax, duty, cess or fee as referred to in clause (a) thereof, there were more stringent conditions for allowing the employer's contribution as compared to those items covered in 12. This differential treatment of employer's contrib vis tax, duty, cess or fee referred to in section 43B was further made abundantly clear vide Finance Act 1988, by the insertion of second proviso to Section 43B. It put the onus on the employer to pay his contribution on or before the due dates specified under the respective welfare funds, as evident from the unambiguous language of second proviso to Section 43B which read as under:- *Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless suc actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of section (1) of section 36." 4.13. Later on, the second proviso was further amended vide Finance Act 1989 which did not relax the rigours of employer's obligation under section 43B but only provided for the time taken for realisation of payment of PF/ESI by modes other than cash as under:- Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36, M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 9 AY 2019-20 deduction for the same accounting year if paid after the closing of accounting year but before due date of filling of Return of However, the relaxations of first proviso did not apply to employer's contribution to labour welfare funds such as PF/ESI etc referred to in clause (b) of 43B. The reason was that employer ntribution of employees and deprive the workmen of the rightful benefits under social welfare legislations by delaying payment of contributions to welfare funds. Thus, though the emplover's contribution in clause (b) was included in section 43B alongside those items like tax, duty, cess or fee as referred to in clause (a) thereof, there were more stringent conditions for allowing the employer's contribution as compared to those items covered in 12. This differential treatment of employer's contribution vis a vis tax, duty, cess or fee referred to in section 43B was further made abundantly clear vide Finance Act 1988, by the insertion of second proviso to Section 43B. It put the onus on the employer to pay his contribution on or before the due dates specified under the respective welfare funds, as evident from the unambiguous language of second proviso to Section 43B *Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of 4.13. Later on, the second proviso was further amended vide lax the rigours of employer's obligation under section 43B but only provided for the time taken for realisation of payment of PF/ESI by modes other than Provided further that no deduction shall, in respect of any sum b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the section (1) of section 36, and where such payment has been cash, the sum has been realised within fifteen days from the due date. 4.14. Thus, while tax, duty, cess, fee etc., coming under clause (a) of section 43B were allowed in the same accounting year if paid on or before the due date for per First Proviso, Employers' contribution to the employee welfare funds like PF/ESI etc coming under clause (b) were allowed only if paid within the prescribed due date under respective welfare fund schemes as per Second Pr section 43B till 2003. 4.15. In Finance Act. 2003, amendments were made do away with this differentiation between tax, duty, cess and fee under clause (a) of section 43B and Employee's Welfare Funds under clause (b). The d payment of employer's contribution was also now linked with due date for filing of return of income us. 139(1) of Income Tax Act, at par with other payments mentioned in clause (a) of section 43B. Thus, in Finance Act, 2003, two changes were made in section 43B viz. deletion of the second proviso to section 43B and further amendment in the first proviso with effect from 1st April 2004 as under: *Provided that nothing contained in this section shall apply in relation to any sum which is actually or before the due date applicable in his case for furnishing the retum of income under sub of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence furnished by the assessee along with such return. 4.16. The question as to whether this amendment brought about by Finance Act, 2003 to the first and second proviso of section 43B is prospective or retrospective came up for consideration before the Hon'ble Supreme Court in the case of CIT v. Alom Extrusions Ltd. [2009] 319 IT 306/185 Taxman 416. Having considered the legislative intent and purpose, the Hon'ble Supreme Court held that amendment as enacted by Finance act 2003 led to equati contributions to welfare funds and that that though the M/s G.L. Construction Pvt. Ltd. and where such payment has been made otherwise than in cash, the sum has been realised within fifteen days from the 4.14. Thus, while tax, duty, cess, fee etc., coming under clause (a) of section 43B were allowed in the same accounting year if paid on or before the due date for filing of return us. 139(1) as per First Proviso, Employers' contribution to the employee welfare funds like PF/ESI etc coming under clause (b) were allowed only if paid within the prescribed due date under respective welfare fund schemes as per Second Pr section 43B till 2003. 4.15. In Finance Act. 2003, amendments were made do away with this differentiation between tax, duty, cess and fee under clause (a) of section 43B and contributions to various Employee's Welfare Funds under clause (b). The d payment of employer's contribution was also now linked with due date for filing of return of income us. 139(1) of Income Tax Act, at par with other payments mentioned in clause (a) of section 43B. Thus, in Finance Act, 2003, two changes were de in section 43B viz. deletion of the second proviso to section 43B and further amendment in the first proviso with effect from 1st April 2004 as under: *Provided that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the retum of income under sub- section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. 4.16. The question as to whether this amendment brought about by Finance Act, 2003 to the first and second proviso of section 43B is prospective or retrospective came up for n before the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. [2009] 319 IT 306/185 Taxman 416. Having considered the legislative intent and purpose, the Hon'ble Supreme Court held that amendment as enacted by Finance act 2003 led to equating tax, duty, cess, and fee with contributions to welfare funds and that that though the M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 10 AY 2019-20 made otherwise than in cash, the sum has been realised within fifteen days from the 4.14. Thus, while tax, duty, cess, fee etc., coming under clause (a) of section 43B were allowed in the same accounting year if filing of return us. 139(1) as per First Proviso, Employers' contribution to the employee welfare funds like PF/ESI etc coming under clause (b) were allowed only if paid within the prescribed due date under respective welfare fund schemes as per Second Proviso of 4.15. In Finance Act. 2003, amendments were made do away with this differentiation between tax, duty, cess and fee under contributions to various Employee's Welfare Funds under clause (b). The due date for payment of employer's contribution was also now linked with due date for filing of return of income us. 139(1) of Income Tax Act, at par with other payments mentioned in clause (a) of section 43B. Thus, in Finance Act, 2003, two changes were de in section 43B viz. deletion of the second proviso to section 43B and further amendment in the first proviso with *Provided that nothing contained in this section shall apply in paid by the assessee on or before the due date applicable in his case for furnishing the section (1) of section 139 in respect of the previous year in which the liability to pay such sum was of such payment is furnished by the assessee along with such return. 4.16. The question as to whether this amendment brought about by Finance Act, 2003 to the first and second proviso of section 43B is prospective or retrospective came up for n before the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. [2009] 319 IT 306/185 Taxman 416. Having considered the legislative intent and purpose, the Hon'ble Supreme Court held that amendment as enacted by ng tax, duty, cess, and fee with contributions to welfare funds and that that though the amendments were with effect from 1st April 2004, they were retrospective in nature and would operate from 1 6. Before us, the Ld. Counsel of the assesse additional ground submitted that the CPC is not authorized to carry out disallowance of ESI/PF invoking section 143(1)(a)(iv) of the Act. In support of the contention he relied on the decision of the Mumbai ‘SMC’ Bench in the case of PR Packaging Services v. CIT in ITA No. 2376/Mum/2022 for assessment year 2019 6.1 In support of ground, he submitted that the amount of disallowance of Rs.12,71,218/ Rs.9,47,090/- and professional tax deducted out of salary of Rs.3,24,125/-. The Ld. Cou paid is not hit by the section 36(1)(va) of the Act and therefore, same should be allowed on the basis of payment made in terms of section 43B of the Act. 7. On the other hand the Ld. Departmental Representative (DR) submitted that in view of the decision of the Hon’ble Supreme Court in the case of Checkmet Services Pvt. Ltd. v. CIT (2022) 440 ITR 518 (SC) disallowance u/s 36(1)(va) of the Act can be made even under the intimation u/s 143(1)(a) warranting prima facie adjustment u/s 143(1) of the Act. 8. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find M/s G.L. Construction Pvt. Ltd. amendments were with effect from 1st April 2004, they were retrospective in nature and would operate from 1 st Before us, the Ld. Counsel of the assessee submitted that the CPC is not authorized to carry out disallowance of ESI/PF invoking section 143(1)(a)(iv) of the Act. In support of the contention he relied on the decision of the Mumbai ‘SMC’ Bench in the case of PR Packaging Services v. CIT in 2376/Mum/2022 for assessment year 2019- In support of ground, he submitted that the amount of disallowance of Rs.12,71,218/- consist of ESI/PF contribution of and professional tax deducted out of salary of . The Ld. Counsel submitted that professional tax paid is not hit by the section 36(1)(va) of the Act and therefore, same should be allowed on the basis of payment made in terms of section 43B of the Act. On the other hand the Ld. Departmental Representative (DR) ubmitted that in view of the decision of the Hon’ble Supreme Court in the case of Checkmet Services Pvt. Ltd. v. CIT (2022) 440 ITR 518 (SC) disallowance u/s 36(1)(va) of the Act can be made even under the intimation u/s 143(1)(a)(i) of the Act being incor warranting prima facie adjustment u/s 143(1) of the Act. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. We find M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 11 AY 2019-20 amendments were with effect from 1st April 2004, they were st April 1988.” e in support of submitted that the CPC is not authorized to carry out disallowance of ESI/PF invoking section 143(1)(a)(iv) of the Act. In support of the contention he relied on the decision of the Mumbai ‘SMC’ Bench in the case of PR Packaging Services v. CIT in -2020. In support of ground, he submitted that the amount of consist of ESI/PF contribution of and professional tax deducted out of salary of nsel submitted that professional tax paid is not hit by the section 36(1)(va) of the Act and therefore, same should be allowed on the basis of payment made in terms of On the other hand the Ld. Departmental Representative (DR) ubmitted that in view of the decision of the Hon’ble Supreme Court in the case of Checkmet Services Pvt. Ltd. v. CIT (2022) 440 ITR 518 (SC) disallowance u/s 36(1)(va) of the Act can be made even under of the Act being incorrect claim warranting prima facie adjustment u/s 143(1) of the Act. We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. We find u/s 143(1)(a)(iv) adjustment of in income indicated in the audit report processing the return of income while computing the total income for the purpose of return of income. The relevant provision of section 143(1) of the Act reproduced as under: “Section 143(1) Where a returns has been made under section 139, or in response to a notice under sub 142 such return shall be processed in the following manner, namely :- (a) The total income or loss shall be co following adjustments, namely: (i) Any arithmetical error in the return An incorrect claim, if such incorrect claim is apparent from any information in the return; (ii) Disallowance of loss claimed, if return of the previous year for whic beyond the due date specified under sub 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 (v) disallowance of deduction claimed under *[section 10AA or under any of the provisions of Chapter VI "C. Deductions in respect of certain incomes", if ] the return is furnished beyond the due date specified under sub 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: M/s G.L. Construction Pvt. Ltd. adjustment of disallowance of expenditure o income indicated in the audit report can be processing the return of income if same is not taken into account while computing the total income for the purpose of return of . The relevant provision of section 143(1) of the Act reproduced as under: Section 143(1) Where a returns has been made under section 139, or in response to a notice under sub-section (1) of section 142 such return shall be processed in the following manner, The total income or loss shall be computed after making the following adjustments, namely:- Any arithmetical error in the return An incorrect claim, if such incorrect claim is apparent from any information in the return; Disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub 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 *[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 of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or 16 which has not been included in computing the total income in the return: M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 12 AY 2019-20 nce of expenditure or increase can be made while if same is not taken into account while computing the total income for the purpose of return of . The relevant provision of section 143(1) of the Act is Section 143(1) Where a returns has been made under section section (1) of section 142 such return shall be processed in the following manner, mputed after making the An incorrect claim, if such incorrect claim is apparent Disallowance of loss claimed, if return of the previous h set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of (iv) disallowance of expenditure [or increase in income] indicated in the audit report but not taken into account (v) disallowance of deduction claimed under *[section 10AA or 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) (vi) addition of income appearing in Form 26AS or Form 16A or 16 which has not been included in computing the total Provided that no such adjustments shall be made unless an intimation is given to th in writing or in electronic mode: 8.1 The Ld. Counsel submitted that delayed payment of ESI/PF cannot be adjusted invoking section 143(1)(a)(iv) of the Act for the reason that payment of ESI/PF is not a claim of expenditure but it is a claim of deduction. clear that any incorrect claim made disallowed invoking section 143(1)(a)(i that Tribunal in the case of in ITA No. 3270/Mum/2022 in order dated 17.02.2023 considering the decision of the Tribunal in the case of Services (supra) held that pursuant to the decision of the Hon’ble Supreme Court in the case of Checkmet Services Pvt. Ltd. (supra) the claim of deduction towards employees contribution to PF and ESI made by the taxpayer becomes an incorrect prima facie adjustment u/s 143(1) of the Act. The relevant finding of the Tribunal (supra) "3.1. The Id. AR vehemently relied on the decision of the Co ordinate Bench of this Tribunal in the case of P.R. Packaging Services in IT No.2376/Mum/2022 dated 07/12/22 (authored by the undersigned) wherein this issue has been decided in favour of the ass rendered by applying the provisions of Section 143(1)(iv) of the Act. Pursuant to the aforesaid decision of the Hon'ble Supreme Court, the claim of deduction towards employee's contribution to PF & ESI made by the warranting primafacie adjustment us.143(1) of the Act. Hence, M/s G.L. Construction Pvt. Ltd. Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode:” The Ld. Counsel submitted that delayed payment of ESI/PF be adjusted invoking section 143(1)(a)(iv) of the Act for the reason that payment of ESI/PF is not a claim of expenditure but it is a claim of deduction. On perusal of the above provisions, clear that any incorrect claim made in the return of income invoking section 143(1)(a)(i) of the Act. We further find that Tribunal in the case of Nissan Enterprises Ltd. v. DCIT CPC in ITA No. 3270/Mum/2022 in order dated 17.02.2023 considering the decision of the Tribunal in the case of Services (supra) held that pursuant to the decision of the Hon’ble Supreme Court in the case of Checkmet Services Pvt. Ltd. (supra) the claim of deduction towards employees contribution to PF and ESI made by the taxpayer becomes an incorrect claim warranting prima facie adjustment u/s 143(1) of the Act. The relevant finding of the Tribunal (supra) is reproduced as under: "3.1. The Id. AR vehemently relied on the decision of the Co ordinate Bench of this Tribunal in the case of P.R. Packaging Services in IT No.2376/Mum/2022 dated 07/12/22 (authored by the undersigned) wherein this issue has been decided in favour of the assessee. We find that the said decision was rendered by applying the provisions of Section 143(1)(iv) of the Act. Pursuant to the aforesaid decision of the Hon'ble Supreme Court, the claim of deduction towards employee's contribution to PF & ESI made by the assessee becomes .an incorrect claim warranting primafacie adjustment us.143(1) of the Act. Hence, M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 13 AY 2019-20 Provided that no such adjustments shall be made unless an e assessee of such adjustments either The Ld. Counsel submitted that delayed payment of ESI/PF be adjusted invoking section 143(1)(a)(iv) of the Act for the reason that payment of ESI/PF is not a claim of expenditure but it provisions, it is the return of income, can be ) of the Act. We further find Enterprises Ltd. v. DCIT CPC in ITA No. 3270/Mum/2022 in order dated 17.02.2023 after considering the decision of the Tribunal in the case of PR Packaging Services (supra) held that pursuant to the decision of the Hon’ble Supreme Court in the case of Checkmet Services Pvt. Ltd. (supra), the claim of deduction towards employees contribution to PF and claim warranting prima facie adjustment u/s 143(1) of the Act. The relevant finding "3.1. The Id. AR vehemently relied on the decision of the Co- ordinate Bench of this Tribunal in the case of P.R. Packaging Services in IT No.2376/Mum/2022 dated 07/12/22 (authored by the undersigned) wherein this issue has been decided in essee. We find that the said decision was rendered by applying the provisions of Section 143(1)(iv) of the Act. Pursuant to the aforesaid decision of the Hon'ble Supreme Court, the claim of deduction towards employee's contribution assessee becomes .an incorrect claim warranting primafacie adjustment us.143(1) of the Act. Hence, the decision relied by the Id. AR would not advance the case of the assessee. 3.2. In view of the aforesaid observations and respectfully following the decis supra, the grounds raised by the assessee are hereby dismissed" 8.2 Therefore, respectfully following the decision of the Hon’ble Supreme Court in the Checkmet Services Pvt. Ltd. (supra) and finding of the Tribunal in the case o are of the opinion that adjustment for employees contribution to PF and ESI of for late deposit after the due dates can be made by the CPC while processing the return of income. The additional ground raised by the assessee is accordingly dismissed. 8.3 As far as the ground of assessee for disallowance of Rs.12,71,218/- which professional tax deducted from salary. In our opinion deduction of professional tax is allowed to the terms of section 43B of the Act and therefore, we feel it appropriate to restore this issue back to the file of the Ld. Assessing Officer for verification and if this claim of the assessee is found to be correct then the professional tax of Rs.3,24,125/ per the provisions of section 43B of the Act. The ground of appeal of the assessee is accordingly partly allowed. M/s G.L. Construction Pvt. Ltd. the decision relied by the Id. AR would not advance the case of the assessee. 3.2. In view of the aforesaid observations and respectfully following the decision of the Hon'ble Supreme Court referred to supra, the grounds raised by the assessee are hereby Therefore, respectfully following the decision of the Hon’ble Supreme Court in the Checkmet Services Pvt. Ltd. (supra) and nal in the case of Nissan Enterprises (supra) we are of the opinion that adjustment for employees contribution to PF and ESI of for late deposit after the due dates can be made by the CPC while processing the return of income. The additional ground by the assessee is accordingly dismissed. As far as the ground of assessee for disallowance of which comprised of Rs.3,24,125/ professional tax deducted from salary. In our opinion deduction of professional tax is allowed to the assessee only on payment basis in terms of section 43B of the Act and therefore, we feel it appropriate to restore this issue back to the file of the Ld. Assessing Officer for and if this claim of the assessee is found to be correct then the professional tax of Rs.3,24,125/- made to be allowed as per the provisions of section 43B of the Act. The ground of appeal of the assessee is accordingly partly allowed. M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 14 AY 2019-20 the decision relied by the Id. AR would not advance the case of 3.2. In view of the aforesaid observations and respectfully ion of the Hon'ble Supreme Court referred to supra, the grounds raised by the assessee are hereby Therefore, respectfully following the decision of the Hon’ble Supreme Court in the Checkmet Services Pvt. Ltd. (supra) and f Nissan Enterprises (supra) we are of the opinion that adjustment for employees contribution to PF and ESI of for late deposit after the due dates can be made by the CPC while processing the return of income. The additional ground As far as the ground of assessee for disallowance of comprised of Rs.3,24,125/- being professional tax deducted from salary. In our opinion deduction of assessee only on payment basis in terms of section 43B of the Act and therefore, we feel it appropriate to restore this issue back to the file of the Ld. Assessing Officer for and if this claim of the assessee is found to be correct, made to be allowed as per the provisions of section 43B of the Act. The ground of appeal of 9. In the result, the appeal of the assessee is partly allowed for statistical purposes. Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 23/02/2023. Sd/- (PAVAN KUMAR GADALE JUDICIAL MEMBER Mumbai; Dated: 23/02/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// M/s G.L. Construction Pvt. Ltd. In the result, the appeal of the assessee is partly allowed for Order pronounced under Rule 34(4) of the ITAT Rules, 02/2023. Sd/ PAVAN KUMAR GADALE) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai M/s G.L. Construction Pvt. Ltd. ITA No. 2846/M/2022 15 AY 2019-20 In the result, the appeal of the assessee is partly allowed for Order pronounced under Rule 34(4) of the ITAT Rules, Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai