SOHAN LAL TAMBI, JAIPUR V. ITO, WARD1(4), JAIPUR

ITA 40/JPR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6408 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 09-06-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONISHA CHOUDHARY JCIT A
• Keywords: Principle of natural justice
• Section: 43B; 143(1); 139(1); 44AB; 43; 13; 22; 154; 15; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 40/JP/2021 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2019-20 SOHAN LAL TAMBI D-50, JHAKHESHWAR MARG, BANI PARK, JAIPUR. CUKE VS. THE ITO, WARD-1(4), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAKPT 2087 Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RE SPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MUKESH KHANDELWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. MONISHA CHOUDHARY (JCIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/08/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 16/08/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LD. CIT(A), DELHI (NFAC) DATED 26.04.2021 FOR THE ASSES SMENT YEAR 2019- 20 WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL:- 1. THAT THE ORDER PASSED BY LD. CIT(A) IS AGAINST THE PRINCIPLES OF NATURAL JUSTICES AS THE SAME HAS BEEN PASSED WITHOU T CONSIDERING THE SUBMISSIONS GIVEN BY THE APPELLANT IN THE ONLIN E ACCOUNT OF WEB PORTAL OF THE DEPARTMENT. ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 2 2. THAT THE ORDER PASSED BY LD. CIT(A) IS BAD IN LA W AS HE FAILED TO APPRECIATE THAT DISALLOWANCE UNDER SECTION 36(1) (VA) IS HIGHLY DEBATABLE ISSUE AND HENCE SUCH ADJUSTMENT IS NOT PE RMISSIBLE WHILE PROCESSING THE RETURN UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961. 3. THAT THE LD. CIT(A) HAS ERRED IN LAW IN SUSTAINI NG THE DISALLOWANCE MADE BY LD. AO FOR RS. 1,61,099/- BEIN G THE AMOUNT COLLECTED FROM EMPLOYEES TOWARDS CONTRIBUTION TO WE LFARE FUNDS BUT DEPOSITED LATER THAN THE SCHEDULED DATES AS PER PROVISIONS OF PF ACT, BUT DEPOSITED PRIOR TO FILING THE RETURN UN DER SECTION 139(1) OF THE INCOME TAX ACT, 1961 IGNORING THE BIN DING JUDGMENT OF THE HONORABLE JURISDICTION HIGH COURT O F RAJASTHAN IN THE CASE OF ITO VS. SBBJ (363 ITR 70). 2. DURING THE COURSE OF HEARING, THE LD AR SUBMITT ED THAT THE ASSESSEE HAD COLLECTED A SUM OF RS. 2,17,664/- FROM ITS EMPLOYEES AGAINST THEIR CONTRIBUTION TOWARDS EMPLOYEES STATE INSURANCE AND PROVIDENT FUND. AS PER PROVISIONS OF ESI ACT AND PF ACT ALL SUCH CONTRIBUTIONS ARE REQUIRED TO BE DEPOSITED WITHIN A CERTAIN TIME. HOWEVER DUE TO SOME DIFFICULTIES, THE ASSESSEE COUL D DEPOSIT A SUM OF RS. 1,61,099/- BEYOND THE PRESCRIBED DATES AS PER A BOVE SAID STATUTES. HOWEVER, ALL SUCH CONTRIBUTIONS WERE DEPOSITED PRIO R TO DUE DATE OF FILING ITR U/S 139(1) OF THE ACT. THE ASSESSEES AC COUNTS ARE SUBJECT TO AUDIT U/S 44AB OF THE INCOME TAX ACT, 1961 AND IN T HE PRESCRIBED FORM OF AUDIT REPORT VIZ. FORM 3CD DETAILS OF CONTRIBUTI ONS RECEIVED FROM THE EMPLOYEES FOR WELFARE FUNDS AND THEIR DEPOSIT INTO RESPECTIVE FUNDS ARE REQUIRED TO BE MENTIONED BY THE AUDITOR WHEREIN THE CONTRIBUTIONS ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 3 DEPOSITED LATELY THAN PRESCRIBED DATES UNDER RESPEC TIVE STATUTE HAVE BEEN HIGHLIGHTED. THE SAID AUDIT REPORTS WERE SUBMI TTED TO CPC PRIOR TO FURNISHING OF RETURN. WHILE PROCESSING THE RETURNS, THE CPC SENT A COMMUNICATION TO THE ASSESSEE THAT THE AMOUNTS DEPO SITED LATELY THAN PRESCRIBED UNDER RESPECTIVE STATUTE ARE LIABLE TO B E DISALLOWED IN TERMS OF SECTION 36(1)(VA) OF THE INCOME TAX ACT, 1961. A REPLY WAS SUBMITTED DRAWING ATTENTION OF CPC THAT SUCH CONTRI BUTIONS DEPOSITED PRIOR TO DUE DATE OF FILING ITR ARE TO BE ALLOWED I N VIEW OF BINDING JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT O F RAJASTHAN IN THE CASE OF CIT V/S SBBJ 363 ITR 70. HOWEVER NOT CONVIN CED WITH THE SAME, THE CPC DISALLOWED SUCH CONTRIBUTIONS AND ADD ED THE SAME IN THE RETURNED INCOME FOR BOTH THE YEARS. THE ASSESSEE FI LED FIRST APPEAL BEFORE THE LD. CIT (A) DRAWING HIS ATTENTION TOWARD S THE AFORESAID JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT. HOWEV ER, THE LD CIT(A) HAS SUSTAINED THE ABOVE ADJUSTMENT BY RELYING ON TH E JUDGMENT OF THE HONBLE MADRAS, GUJARAT AND KERALA HIGH COURT. AGAI NST THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 3. IN GROUND NO. 2, THE ASSESSEE HAS CHALLENGED THE ADDITION BY WAY OF ADJUSTMENT AS NOT PERMISSIBLE WHILE PROCESSING T HE RETURN U/S 143(1)(A) OF THE IT ACT. 4. IT WAS SUBMITTED BY THE LD AR THAT THIS GROUND W AS NOT TAKEN BEFORE THE LD. CIT (A) DUE TO INADVERTENT MISTAKE. HOWEVER, A REQUEST HAS BEEN MADE TO ADMIT THIS GROUND BEING PURELY LEG AL IN NATURE AND WHICH GOES TO THE ROOT OF THE MATTER AND IS COVERED WITH THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF NTPC 22 9 ITR 383. ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 4 5. IT WAS SUBMITTED THAT PROVISIONS OF SECTION 143 (1)(A) ALLOWS FOLLOWING TYPES OF ADJUSTMENTS TO BE MADE WHILE PRO CESSING THE RETURN OF INCOME:- I. ANY ARITHMETICAL ERROR II. ANY INCORRECT CLAIM, IF SAME IS APPARENT FROM A NY INFORMATION IN RETURN III. CLAIM OF SET OFF OF CARRIED FORWARD LOSS, IF T HE RETURN FOR THE YEAR OF LOSS WAS FURNISHED BEYOND STIPULATED DATE U/S 1 39(1) IV. DISALLOWANCE OF EXPENDITURE INDICATED IN THE AU DIT REPORT BUT NOT TAKEN IN RETURN V. DISALLOWANCE OF DEDUCTION CLAIMED U/S 10AA, 80-I A, 80-IAB, 80- IB, 80-IC, 80-ID OR 80-IE IF RETURN FURNISHED BEYON D STIPULATED DATE U/S 139(1) 6. IT WAS SUBMITTED THAT THE ADJUSTMENT AS PROPOSED BY CPC CAN BE CATEGORIZED IN POINT NO. II OR POINT NO. IV ABOVE. HOWEVER IN POINT NO. IV, IT IS MENTIONED THAT SUCH CLAIM MUST BE AS INDICATE D BY THE AUDITOR. IN CASE OF AUDIT REPORT U/S 44AB, THE AUDITOR ONLY SUB MITS A FACTUAL POSITION ABOUT CONTRIBUTIONS OF EMPLOYEES TOWARDS W ELFARE FUNDS AND ITS DEPOSIT INTO RESPECTIVE FUND ACCOUNT AND NO COMMENT IS MENTIONED BY THE AUDITOR ABOUT ITS ALLOWABILITY AS THE SAME IS N OT SOUGHT FROM THE AUDITOR. THEREFORE THIS ADJUSTMENT IS NOT PERMISSIB LE AS PER POINT NO. IV. IN CASE OF POINT NO. II, THE DISALLOWANCE MUST BE A PPARENT FROM THE INFORMATION IN THE RETURN. SO FAR AS DISALLOWANCE O F ANY EXPENDITURE IS CONCERNED, APPARENT MEANS ONE WHICH IS CLEARLY ADMI SSIBLE AS PER PROVISIONS OF LAW AS SUPPORTED BY JUDICIAL PRONOUNC EMENTS. AS THE JUDICIAL PRONOUNCEMENT, THIS EXPENDITURE IS IN FAVO UR OF THE ASSESSEE AS PER JURISDICTIONAL HIGH COURT AND HENCE SUCH ADJUST MENT IS NOT ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 5 PERMISSIBLE. THEREFORE UNDER BOTH THE ABOVE SAID PO INTS, SUCH ADJUSTMENT AS DONE BY CPC IS NOT PERMISSIBLE AND TH EREFORE THE ACTION OF THE CPC IS ILLEGAL AND UNJUSTIFIED AND DESERVES TO BE QUASHED. 7. IT WAS SUBMITTED THAT PROCEEDINGS U/S 143(1)(A) ARE AKIN TO PROCEEDINGS U/S 154 OF THE INCOME TAX ACT, 1961. TH IS FACT IS VERIFIABLE FROM CIRCULAR NO. 581 DATED 28.09.1990 ISSUED BY CB DT WHEREIN IT WAS STATED THAT DISALLOWANCE OF DEDUCTIONS CLAIMED U/S 43B OF THE INCOME TAX ACT, 1961 WHILE PROCESSING THE RETURN IN VIEW O F NON SUBMISSION OF PROOF OF PAYMENT WERE NOT AMENABLE FOR RECTIFICATIO N U/S 154 AND IT WAS HELD THAT SUBSEQUENT FURNISHING OF PROOF OF PAYMENT PRIOR TO DATE OF FURNISHING ITR COULD NOT HAVE RECTIFIED THE ACTION TAKEN U/S 143(1)(A). HOWEVER IMMEDIATELY A CLARIFICATION WAS ISSUED BY T HE BOARD WHEREIN THE ABOVE VERSION WAS REVERSED AND IT WAS STATED TH AT IF THE ASSESSEE FURNISHES PROOF OF PAYMENT SUBSEQUENT TO ORDER U/S 143(1)(A), ACTION U/S 154 CAN BE TAKEN. THIS SHOWS THAT CBDT ALSO CON SIDERS THE PROCEEDINGS U/S 154 AND U/S 143(1)(A) AS ONE AND SA ME THING. IT WAS SUBMITTED THAT THE RECTIFICATION PROCEEDINGS U/S 15 4 CANNOT BE TAKEN IN DEBATABLE ISSUES AS HELD BY A LARGE NUMBER OF JUDIC IAL RULINGS. SINCE THE MATTER OF ALLOWANCE OF EMPLOYEES CONTRIBUTION TO WE LFARE FUNDS IS HIGHLY DEBATABLE ISSUE AND HENCE SUCH DISALLOWANCE COULD N OT HAVE BEEN MADE U/S 143(1)(A) WHILE PROCESSING THE RETURN U/S 143(1 )(A). THERE ARE VARIOUS HIGH COURTS INCLUDING THE JURISDICTIONAL HI GH COURT OF RAJASTHAN WHEREIN IT HAS BEEN HELD THAT EMPLOYEES CONTRIBUTIO N TO WELFARE PAYMENT IS ALLOWABLE DEDUCTION IF DEPOSITED PRIOR T O PRESCRIBED DATE OF FILING ITR U/S 139(1) WHEREAS THERE ARE CERTAIN HIG H COURTS INCLUDING GUJARAT HIGH COURT WHO HAVE HELD SUCH SUMS TO BE NO T DEDUCTIBLE IF DEPOSITED AFTER THE PRESCRIBED DATE UNDER RESPECTIV E STATUTE. THEREFORE ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 6 THE ACTION OF DISALLOWING SUCH AMOUNTS WHILE PROCES SING THE RETURN IS NOT ACCORDANCE WITH LAW AND REQUIRES TO BE REVERSED . 8. IN GROUND NO. 3, THE ASSESSEE HAS CHALLENGED THE SUSTENANCE THE DISALLOWANCE MADE BY AO FOR RS. 1,61,099/-. IT WAS SUBMITTED THAT THE LD. CIT (A) HAS RELIED ON THE CASE OF HONBLE MADRA S, GUJARAT AND KERALA HIGH COURT FOR SUSTAINING THE DISALLOWANCE MADE BY THE CPC WHILE PROCESSING THE RETURN. THE LD. CIT (A) FORGOT TO TA KE INTO CONSIDERATION THE REPLY FILED BY THE ASSESSEE ON THE COMMUNICATIO N ISSUED BY CPC FOR MAKING THE DISALLOWANCE ON ACCOUNT OF EMPLOYEES CO NTRIBUTION TO WELFARE FUNDS. IN THE REPLY FILED BY THE ASSESSEE, THE ASSESSEE HAD MENTIONED ABOUT THE BINDING JUDGMENTS OF THE HONBL E RAJASTHAN HIGH COURT IN THE CASE OF CIT V/S UDAIPUR DUGDH UTPADAK SAHKARI SANGH AND CIT V/S SBBJ . THE APPROACH SO ADOPTED BY THE LD. C IT (A) IS AGAINST THE LAW AND UNJUSTIFIED. 9. IT WAS SUBMITTED THAT RECENTLY, A SIMILAR MATTER CAME BEFORE THE HONBLE ITAT, AGRA BENCH IN THE CASE OF MAHADEV COL D STORAGE V/S AO, ALIGARH (ITA NO. 41 & 42/AGR/2021 DATED 14.06.2021) WHEREIN ALSO THE ISSUE WAS EXACTLY SIMILAR THAT THE AO WHILE PROCESS ING THE RETURN MADE DISALLOWANCE OF CONTRIBUTION RECEIVED FROM EMPLOYEE S WHICH WAS DEPOSITED LATELY THAN PRESCRIBED DATES IN RESPECTIV E STATUTE BUT DEPOSITED PRIOR TO THE SCHEDULED DATE OF FILING RET URN U/S 139(1). THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT (A) WHO IN FACELESS PROCEEDINGS SUSTAINED THE ACTION OF THE AO RELYING ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF STATE ROAD TRANSPORT CORPORATION - 366 ITR 170 AND IGNORING THE DECISION OF THE JURISDICTIONAL HIGH COURT OF ALLAHABAD RENDERED IN THE CASE OF SAG AN FOUNDRY P LTD. ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 7 V/S CIT (145 DTR 265). THE HONBLE ITAT, AGRA BENCH DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE AND RELEVANT FINDIN GS READS AS UNDER: 'IN THE LIGHT OF THE ABOVE SAID DISCUSSION, JUDGMEN TS OF SC AND HCS, WE HOLD THAT NFAC IS BOUND BY THE BINDING DECI SION OF THE JURISDICTIONAL ALLAHABAD HIGH COURT, AS THE ASSESSI NG OFFICER IS SITUATED WITHIN THE TERRITORIAL AND SUBJECTIVE JURI SDICTION OF HIGH COURT. HENCE, WE ALLOW THE APPEAL OF THE ASSESSEE B Y RESPECTFULLY FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT IN THE MATTER OF SAGUN FOUNDRY P LTD. V/S CIT (2017) (78 TAXMANN 47) .' 10. IT WAS SUBMITTED THAT IN THE INSTANT CASE, THE LD. CIT (A) WAS BOUND TO FOLLOW THE BINDING JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT AND WAS SUPPOSED TO ALLOW THE APPEAL OF THE A SSESSEE. ON THIS ISSUE, THE ASSESSEE RELIES ON JUDICIAL PRONOUNCEMEN TS OF THE HONBLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. SBBJ 363 IT R 70, CIT VS. RAJASTHAN STATE BEVERAGES CORP. LTD. 393 ITR 421 AN D PCIT VS. RAJASTHAN RENEWABLE ENERGY CROP. LTD. (DBIT APPEAL NO. 49/2019 DATED 06.08.2019) WHEREIN IT HAS BEEN HELD THAT CONTRIBUTION RECEIVE D FROM EMPLOYEES FOR WELFARE FUNDS AS PER SECTION 36( 1)(VA) IS ALLOWABLE AS DEDUCTION IF THE ASSESSEE HAS DEPOSITED THE SUM SO COLLECTED BEFORE DUE DATE OF FILING THE RETURN U/S 139(1) OF THE INC OME TAX ACT, 1961. IT WAS SUBMITTED THAT THE ABOVE DECISIONS OF THE HONB LE JURISDICTIONAL HIGH COURT OF RAJASTHAN CLEARLY LAYS DOWN THE PROPO SITION THAT EMPLOYEES CONTRIBUTION TO PF/ESI DEPOSITED LATELY T HAN PRESCRIBED DATES UNDER RESPECTIVE STATUTE BUT DEPOSITED PRIOR TO DAT E U/S 139(1) IS AN ALLOWABLE DEDUCTION. ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 8 11. PER CONTRA, THE LD. DR OBJECTED TO THE RAISING OF THE ADDITIONAL GROUND OF APPEAL AND IT WAS SUBMITTED THAT THE ASSE SSEE HAS FAILED TO RAISE THE SAME BEFORE THE LD CIT(A) AND HENCE, THE SAME MAY NOT BE ENTERTAINED AT THIS STAGE OF THE APPELLATE PROCEEDI NGS. IT WAS FURTHER SUBMITTED THAT THERE HAS BEEN A DELAY IN DEPOSIT OF EMPLOYEES CONTRIBUTION TOWARDS PF AND ESI BY THE ASSESSEE AND AS THE SAME HAS NOT BEEN DEPOSITED WITHIN THE STIPULATED TIME FRAME AS PRESCRIBED BY THE RELEVANT STATUE, THE SAME HAS BEEN RIGHTLY DISA LLOWED IN TERMS OF SECTION 36(1)(VA) WHILE PROCESSING THE RETURN OF IN COME U/S 143(1) AND HAS BEEN RIGHTLY CONFIRMED BY THE LD CIT(A) FOLLOWI NG THE DECISION OF THE HONBLE MADRAS, GUJARAT AND KERALA HIGH COURTS. TH E LD DR HAS THUS RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES. 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. ON PERUSAL OF THE AUDIT REPORT SUBMITTED BY THE ASSESSEE AS PART OF HIS RETURN OF INCOME, IT IS NOT ED THAT THE ASSESSEE HAS DEPOSITED THE EMPLOYEESS CONTRIBUTION TOWARDS ESI AND PF WELL BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U /S 139(1) AND THE LAST OF SUCH DEPOSITS WERE MADE ON 11.08.2018 WHEREAS DU E DATE OF FILING THE RETURN FOR THE IMPUGNED ASSESSMENT YEAR 2019-20 WAS 31.10.2019 AND THE RETURN OF INCOME WAS ACTUALLY FILED ON 23.1 0.2019. ADMITTEDLY AND UNDISPUTEDLY, THE EMPLOYEESS CONTRIBUTION TO ESI AND PF WHICH HAVE BEEN COLLECTED BY THE ASSESSEE FROM ITS EMPLOY EES HAVE THUS BEEN DEPOSITED WELL BEFORE THE DUE DATE OF FILING OF RET URN OF INCOME U/S 139(1) OF THE ACT. THE ISSUE IS NO MORE RES INTEGRA IN LIGHT OF SERIES OF DECISIONS RENDERED BY THE HONBLE RAJASTHAN HIGH CO URT STARTING FROM CIT VS. STATE BANK OF BIKANER & JAIPUR (SUPRA) AND SUBSEQUENT DECISIONS. ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 9 13. IN THIS REGARD, WE MAY REFER TO THE INITIAL DEC ISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF CIT VS. STATE BANK OF BIKANER & JAIPUR WHEREIN THE HONBLE HIGH COURT AFTER EXTENSIVELY EX AMINING THE MATTER AND CONSIDERING THE VARIOUS DECISIONS OF THE HONBL E SUPREME COURT AND VARIOUS OTHER HIGH COURTS HAS DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE. IN THE SAID DECISION, THE HONBLE HIGH C OURT WAS PLEASED TO HELD AS UNDER: 20. ON PERUSAL OF SEC.36(1)(VA) AND SEC.43(B)(B) A ND ANALYZING THE JUDGMENTS RENDERED, IN OUR VIEW AS WELL, IT IS CLEAR THAT THE LEGISLATURE BROUGHT IN THE STATUTE SECTION 43(B)(B) TO CURB THE ACTIVITIES OF SUCH TAX PAYERS WHO DID NOT DISCHARGE THEIR STATUTORY LIABILITY OF PAYMENT OF DUES, AS AFORESAID; AND RIG HTLY SO AS ON THE ONE HAND CLAIM WAS BEING MADE UNDER SECTION 36 FOR ALLOWING THE DEDUCTION OF GPF, CPF, ESI ETC. AS PER THE SYSTEM F OLLOWED BY THE ASSESSEES IN CLAIMING THE DEDUCTION I.E. ACCRUAL BA SIS AND THE SAME WAS BEING ALLOWED, AS THE LIABILITY DID EXIST BUT THE SAID AMOUNT THOUGH CLAIMED AS A DEDUCTION WAS NOT BEING DEPOSITED EVEN AFTER LAPSE OF SEVERAL YEARS. THEREFORE, TO PU T A CHECK ON THE SAID CLAIMS/DEDUCTIONS HAVING BEEN MADE, THE SA ID PROVISION WAS BROUGHT IN TO CURB THE SAID ACTIVITIES AND WHIC H WAS APPROVED BY THE HON'BLE APEX COURT IN THE CASE OF ALLIED MOT ORS (P) LTD. (SUPRA). 21. A CONJOINT READING OF THE PROVISO TO SECTION 43 -B WHICH WAS INSERTED BY THE FINANCE ACT, 1987 MADE EFFECTIVE FR OM 01/04/1988, THE WORDS NUMBERED AS CLAUSE (A), (C), (D), (E) AND (F), ARE OMITTED FROM THE ABOVE PROVISO AND, FURTHE R MORE SECOND ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 10 PROVISO WAS REMOVED BY FINANCE ACT, 2003 THEREFORE, THE DEDUCTION TOWARDS THE EMPLOYER'S CONTRIBUTION, IF P AID, PRIOR TO DUE DATE OF FILING OF RETURN CAN BE CLAIMED BY THE ASSESSEE. IN OUR VIEW, THE EXPLANATION APPENDED TO SECTION 36(1)(VA) OF THE ACT FURTHER ENVISAGE THAT THE AMOUNT ACTUALLY PAID BY T HE ASSESSEE ON OR BEFORE THE DUE DATE ADMISSIBLE AT THE TIME OF SU BMITTING RETURN OF THE INCOME UNDER SECTION 139 OF THE ACT IN RESPE CT OF THE PREVIOUS YEAR CAN BE CLAIMED BY THE ASSESSEE FOR DE DUCTION OUT OF THEIR GROSS TOTAL INCOME. IT IS ALSO CLEAR THAT SEC .43B STARTS WITH A NOTWITHSTANDING CLAUSE & WOULD THUS OVERRIDE SEC.36 (1) (VA) AND IF READ IN ISOLATION SEC. 43B WOULD BECOME OBSOLETE . ACCORDINGLY, CONTENTION OF COUNSEL FOR THE REVENUE IS NOT TENABL E FOR THE REASON AFORESAID THAT DEDUCTIONS OUT OF THE GROSS I NCOME FOR PAYMENT OF TAX AT THE TIME OF SUBMISSION OF RETURN UNDER SECTION 139 IS PERMISSIBLE ONLY IF THE STATUTORY LIABILITY OF PAYMENT OF PF OR OTHER CONTRIBUTION REFERRED TO IN CLAUSE ( B) ARE PAID WITHIN THE DUE DATE UNDER THE RESPECTIVE ENACTMENTS BY THE ASSESSEES AND NOT UNDER THE DUE DATE OF FILING OF R ETURN. 22. WE HAVE ALREADY OBSERVED THAT TILL THIS PROVISI ON WAS BROUGHT IN AS THE DUE AMOUNTS ON ONE PRETEXT OR THE OTHER W ERE NOT BEING DEPOSITED BY THE ASSESSEES THOUGH SUBSTANTIAL BENEF ITS HAD BEEN OBTAINED BY THEM IN THE SHAPE OF THE AMOUNT HAVING BEEN CLAIMED AS A DEDUCTION BUT THE SAID AMOUNTS WERE NO T DEPOSITED. IT IS PERTINENT TO NOTE THAT THE RESPECTIVE ACT SUC H AS PF ETC. ALSO PROVIDES THAT THE AMOUNTS CAN BE PAID LATER ON SUBJ ECT TO PAYMENT OF INTEREST AND OTHER CONSEQUENCES AND TO G ET BENEFIT UNDER THE INCOME TAX ACT, AN ASSESSEE OUGHT TO HAVE ACTUALLY ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 11 DEPOSITED THE ENTIRE AMOUNT AS ALSO TO ADDUCE EVIDE NCE REGARDING SUCH DEPOSIT ON OR BEFORE THE RETURN OF INCOME UNDE R SUB-SECTION (1) OF SECTION 139 OF THE IT ACT. 23. THUS, WE ARE OF THE VIEW THAT WHERE THE PF AND/ OR EPF, CPF, GPF ETC., IF PAID AFTER THE DUE DATE UNDER RESPECTI VE ACT BUT BEFORE FILING OF THE RETURN OF INCOME UNDER SECTION 139(1), CANNOT BE DISALLOWED UNDER SECTION 43B OR UNDER SECTION 36 (1)(VA) OF THE IT ACT. 14. THE SAID DECISION HAS SUBSEQUENTLY BEEN FOLLOWE D IN CIT VS. JAIPUR VIDYUT VITRAN NIGAM LTD. 363 ITR 307, CIT VS . UDAIPUR DUGDH UTPADAK SAHAKARI SANGH LTD. 366 ITR 163, CIT VS RA JASTHAN STATE BEVERAGES CORPORTATION LIMITED (SUPRA) AND PCIT VS RAJASTHAN RENEWABLE ENERGY CORPORATION LTD. IN ALL THESE DEC ISIONS, IT HAS BEEN CONSISTENTLY HELD THAT WHERE THE PF AND ESI DUES AR E PAID AFTER THE DUE DATE UNDER THE RESPECTIVE STATUES BUT BEFORE FILING OF THE RETURN OF INCOME UNDER SECTION 139(1), THE SAME CANNOT BE DIS ALLOWED UNDER SECTION 43B READ WITH SECTION 36(1)(VA) OF THE ACT. 15. WE FURTHER NOTE THAT THOUGH THE LD. CIT(A) HAS NOT DISPUTED THE VARIOUS DECISIONS OF HONBLE RAJASTHAN HIGH COURT A ND VARIOUS OTHER HIGH COURTS INCLUDING HONBLE DELHI HIGH COURT IN C ASE OF CIT VS AIMIL LTD 321 ITR 508 WHICH WERE BROUGHT TO HIS NOTICE BY THE LD AR DURING THE COURSE OF APPELLATE PROCEEDINGS BUT HAS DECIDED TO FOLLOW THE DECISIONS RENDERED BY THE HONBLE MADRAS, GUJARAT A ND KERALA HIGH COURTS. GIVEN THE DIVERGENT VIEWS TAKEN BY THE VAR IOUS HIGH COURTS AND IN THE INSTANT CASE, THE FACT THAT THE JURISDICTION OVER THE ASSESSING OFFICER LIES WITH THE HONBLE RAJASTHAN HIGH COURT, IN OUR CONSIDERED ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 12 VIEW, THE LD CIT(A) OUGHT TO HAVE CONSIDERED AND FO LLOWED THE DECISION OF THE JURISDICTIONAL RAJASTHAN HIGH COURT, AS EVID ENT FROM SERIES OF DECISIONS REFERRED SUPRA, AS THE SAME IS BINDING ON ALL THE APPELLATE AUTHORITIES AS WELL AS THE ASSESSING OFFICER UNDER ITS JURISDICTION IN THE STATE OF RAJASTHAN. 16. IN LIGHT OF AFORESAID DISCUSSION AND IN THE ENT IRETY OF FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION BY WAY OF A DJUSTMENT WHILE PROCESSING THE RETURN OF INCOME U/S 143(1) AMOUNTIN G TO RS 1,61,099/- SO MADE BY THE CPC TOWARDS THE DELAYED DEPOSIT OF T HE EMPLOYEESS CONTRIBUTION TOWARDS ESI AND PF THOUGH PAID WELL BE FORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT IS HEREBY DIRECTED TO BE DELETED AS THE SAME CANNOT BE DISALLOWED UNDER S ECTION 43B READ WITH SECTION 36(1)(VA) OF THE ACT IN VIEW OF THE BI NDING DECISION OF THE HONBLE RAJASTHAN HIGH COURT. 17. GIVEN THAT WE HAVE ADJUDICATED ON THE MERITS OF THE CASE WHEREBY WE HAVE DIRECTED TO DELETE THE ADDITION SO MADE, THE OTHER GROUND OF APPEAL RELATING TO ADJUSTMENT WHILE PROCE SSING THE RETURN OF INCOME AND ISSUE OF INTIMATION U/S 143(1) BY CPC HA S BECOME ACADEMIC IN NATURE AND WE DONOT DEEM IT NECESSARY TO ADJUDIC ATE THE SAME. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 16/08/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 40/JP/2021 SOHAN LAL TAMBI VS. ITO 13 TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16/08/2021. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SOHAN LAL TAMBI, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-1(4), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 40/JP/2021} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR