| The Tax Publishers2021 TaxPub(DT) 5661 (Visakhapatnam-Trib) INCOME TAX ACT, 1961
Section 143(1)
Employees' contribution to PF and ESI would be allowable deduction if the same were paid before due date of filing of return of income although paid after due date under respective Acts.
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Assessment - Intimation under section 143(1) - Prima facie adjustment - Disallowance of employees' contribution to PF and ESI
Assessee-company filed return of income and Department made disallowance of employees' contribution to PF and ESI while processing return of income under section 143(1). On appeal before CIT(A), the assessee submitted that the addition regarding employees' contribution to PF and ESI was a debatable issue; thus, the same could not be added under section 143(1). Further, the assessee submitted that although it paid the employees' contribution to PF and ESI after due date under respective Acts, but before the due date for filing the return of income and hence, it requested to delete the addition.Held: It was undisputed that return was processed under section 143(1) and there was no scrutiny assessment made under section 143(3). It is settled position of law that no debatable issues are permitted to be made adjustments under section 143(1). In instant case, what was added in the intimation under section 143(1), was employees' contribution to PF. However, the said issue being a debatable one, was not permitted to be adjusted while processing the return of income under section 143(1). Furthermore, on merits also, the Tribunal consistently viewed that the employees' contribution to PF and ESI would be allowable deduction if the same were paid before the due date of filing the return of income. Hence, the addition made on account of employees' contribution to PF and ESI was accordingly deleted.
Followed:Dy. CIT, Circle-1 (1), Guntur. v. Andhra Trade Development Corporation (P) Ltd., Guntur. & (Vice-Versa) [ITA No. 434/VIZ/2019, dated 5-5-2021] : 2021 TaxPub(DT) 2583 (Visakhapatnam-Trib) and Tetra Soft (India) (P) Ltd. v. Asstt. CIT (2015) 40 ITR (Trib) 470 (Hyd-Trib) : 2015 TaxPub(DT) 2638 (Hyd-Trib). CIT, West Bengal I v. Vegetable Products Limited (1973) 88 ITR 192 (SC) : 1973 TaxPub(DT) 0421 (SC) M/s. Essae Teraoka (P) Ltd v. Dy. CIT (2014) 366 ITR 408 (Karn) : 2014 TaxPub(DT) 1218 (Karn-HC)
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2018-19
IN THE ITAT, VISAKHAPATNAM BENCH
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