THE MALAD SAHAKARI BANK LTD,MUMBAI vs. NFAC, DELHI

The Appellant, a co-operative society engaged in the business of banking, filed its return of income on 31.10.2018, declaring total income of INR 5,33,12,193/-. The Appellant received communication,

The Appellant filed application for rectification under Section 154 of the Act which was rejected by the Assessing Officer vide order, dated 24.02.2020, holding that disallowance made by the CPC was not a mistakes apparent from the records

Being aggrieved, the Appellant filed appeal before CIT(A). The CIT(A) deleted the addition of INR 6,69,247/- made by the Assessing Officer under Section 43B of the Act. However, the CIT(A) declined to grant any relief to the Assessee as regards disallowance of INR 3,60,252/- under Section 36(1)(va) of the Act holding as under:

The Ld. Authorised Representative for the Appellant appearing before us submitted that the addition of INR 3,60,252/- under Section 36(1)(va) of the Act has been made without appreciating that the employee‟s contribution to PF was deposited before the due date of filing return and was allowable as deduction under Section 36(1)(va) read with Section 43B of the Act as per the judgment of the Hon‟ble Bombay High Court in the case of CIT vs. Hindustan Organics Chemicals Ltd. [2014] 366 ITR 1 (Bombay). Further, the Tribunal has in number of decisions held that the amendments introduced by the Finance Act, 2021 are applicable for Assessment Year 2021-22, and therefore, the CIT(A) has erred in confirming the disallowance by placing reliance on the same. On the basis of the aforesaid, He submitted that the assessing authority was incorrect and rejecting the rectification application filed by the Assessee holding that the additions made to the returned income while processing returned under Section 143(1) of the Act did not constitute a mistake apparent on record.

The Ld. Departmental Representative relied upon the order dated 24.02.2020 passed under Section 154 of the Act and the order of CIT(A) dated 12.11.2021. He further submitted that the amendments to Section 36(l)(va) made vide Finance Act 2021 are to be applied retrospectively, as the same are curative/declaratory in nature and therefore, the order passed by CIT(A) on this issue does not call for any interference.

We have considered the rival submissions and perused the material available on record. It is not in dispute that Appellant had deposited the employees‟ contribution of PF before the due date of filing of Return under Section 139(1) of the Act, though the same were Assessment Year: 2018-19 deposited belatedly beyond the due date specified under the respective statutes. The CIT(A) has sought to justify the additions/adjustments made under Section 143(1) of the Act vide order/intimation dated 07.01.2021 by placing reliance upon the amendments introduced by the Finance Act, 2021 which was passed much later on 28.03.2021 by contending that the amendments are to be interpreted as being clarificatory in nature and therefore, applicable retrospectively. We note that the date on which intimation/order under Section 143(1) of the Act was passed the issue stood decided in the favour of the Appellant by virtue of the judgment of the jurisdictional High Court in the case of CIT vs. Ghatge Patil Transporters Ltd. (2015) 53 taxmann.com 141 (Bom HC) and CIT vs. Hindustan Organics Chemicals Ltd. [2014] 366 ITR 1 (Bombay). Further, even after the introduction of amendments to Section 36(1)(va)/43B of the Act by way of Finance Act, 2021, Hyderabad Bench of the Tribunal had, vide order dated 15.06.2021, in the case of Salzgitter Hydraulics (P.) Ltd. vs ITO, Ward 3(1), Hyderabad: 189 ITD 676 (Hyderabad - Trib.) held that the aforesaid amendments are applicable from Assessment Year 2021-2022. Further, the adjustments/additions in respect of employees contribution to PF fell outside the scope of Section 143(1)(a)(iv) of the Act. Section 143(1)(a)(iv) provides for adjustment in the return of income filed by an assessee in case a disallowance of expenditure is indicated in the audit report but had not taken into account in computing the total income in the return. A perusal of Form 3CD, the form prescribed for filing tax audit report, would show that the tax auditor is not just required to identify and provide details of disallowance of expenditure. Form 3CD also provides for disclosures of various information/details relating to an assessee such as the nature business/profession, books of accounts maintained etc. Further, not all clauses of Form 3CD require the tax auditor to express an opinion. Some of the clauses require the tax auditor to just provide information/details. Clause 20(b) of Form 3CD falls in this category.

In view of the above, Ground No. 1 raised by the Appellant in the present appeal are allowed and addition/disallowance of INR 3,60,252/- made under Section 36(1)(va) of the Act pertaining to deposit of employees‟ contribution to PF after the due date specified in the applicable statute but before the due date of filing income tax return prescribed under Section 139(1) of the Act stands deleted. In view of the aforesaid, Ground No. 2 and 3 raised by the Appellant is disposed off as being infructuous. 5