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Judgment
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 24.11.2025 of the Ld. Addl/JCIT(A)-9, Mumbai (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in DIN & Order No: ITBA/APL/S/250/2025-26/1082947314(1) arising out of the assessment order dated 18.07.2022 u/s 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by ADIT, CPC, Bengaluru, for AY: 2018-19.
On hearing both sides we find that primarily the issue arises out of disallowance of the delayed deposit of contribution towards EPF amounting to Rs.3,73,242/- u/s 143(1)(a) of the Income Tax Act, 1961 and addition of Rs.3,93,106/- by way of rectification order u/s 154 of the Act on account of inconsistency in disallowance u/s 143B of the Act between return filed and Form 3CA -3CD.
On hearing both sides we find that as with regard to disallowance of contribution received from employees towards EPF the contention of ld. Counsel is that the due date referred has to be considered in context to respective statute and it was submitted that the amounts were paid within one month of the date of payment of salary and thus according to the corresponding statute the amounts were paid in due date. This aspect can very well be considered by ld. AO after due verification in the light of decision of Hon’ble Supreme Court in Checkmate Services P. Ltd. CIT-1 (2022) (10) TMI 617 (SC) and therefore, we are inclined to allow the corresponding grounds No. 2 for statistical purpose.
Then with regard to disallowance made by AO of Rs.3,93,106/- u/s 43B of the Act. Ld. Counsel has demonstrated before us that the tax auditor in Column No. 26(i)(B)(b) of Form 3CD, copy of which is available at page No. 8 of the paper book it can be observed that following payments are outstanding on the last day of physical year and not paid before filing of the returns of income:
| Particulars | Amount (in INR) |
| WCT Payable | 56,59,374/- |
| VAT Payable | 10,56,908/- |
| TDS Payable | 10,913/- |
| Total | 67,27,195/- |
We find that while processing the return of assesse CPC has disallowed the following:
| Particulars | Amount in the return of Income | Amount mentioned in Form Annexure 3CD | Variance |
| Inconsistency in amount debited to Profit and Loss Account of the previous year but disallowable under section 43B | 12,07,772/- | 67,27,195/- | 55,19,423/- |
Ld. Counsel has submitted that out of total payable of Rs.67,25,195/ only Rs.3,93,106/- belongs to the year under consideration remaining Rs.63,26,176/- was the opening outstanding amount which relates to the preceding years i.e., preceding to the years under consideration as depicted in the table below:
| Particulars | Opening balance | Addition/(deletion) during the year | Closing balance |
| WCT payable | 52,66,268/- | 3,93,106/- | 56,59,374/- |
| VAT Payable GOA | 1,42,176/- | - | 1,42,176/- |
| VAT Payable Kangra HP | 7,85,557/- | - | 7,85,557/- |
| VAT Payable – PATNA | 4,97,529/- | (3,68,354/-) | 1,29,175/- |
| Total | 66,91,530 | 67,16,282 |
Thus, in regard to this issue on the basis of aforesaid submissions as expenditure is not claimed in profit and loss account, disallowance u/s 43B is not sustainable. We accordingly allow ground No.3.
As a consequence of aforesaid discussion the appeal of assesse is partly allowed with consequences to follow as per determination of issues above.