Section 36(1)(va)

Section 36(1)(va) — the law in short

What the courts have decided on section 36(1)(va), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• Checkmate Services P Ltd v CIT Supreme CourtHelps department
  You deposited employees' PF late but before filing the return. Is the deduction saved?
  No. Employees' contributions are held in trust and are deemed income; the deduction depends on depositing them by the due date under the PF or ESI Act. Section 43B, which governs the employer's own liabilities, does not rescue them.
• Raj Kumar Bothra v DCIT High CourtHelps taxpayer
  CPC disallowed my late-deposited PF and ESI under 143(1)(a). Was a summary adjustment even open to them?
  No, not for an intimation issued in December 2021. The Chhattisgarh High Court held the issue was genuinely debatable on that date, with conflicting High Court authority and the matter pending in the Supreme Court, so the officer had to take scrutiny under s.143(3) rather than adjust summarily.
• Bangiya Gramin Vikash Bank v ITO, Ward 42(1), Berhampore ITATHelps taxpayerNo later treatment found
  Our bank could not upload the statement of financial transactions on time because the core banking system was being migrated during a merger, and the I&CI wing has levied a per-day penalty under section 271FA. Is a technical failure a defence?
  Yes, on these facts. The Kolkata Bench held that an inability to generate the data required for Form 61/61A because the bank was migrating from one version of its core banking solution to another, in the course of a reorganisation and merger, is a reasonable cause, and directed deletion of a penalty of Rs 3,61,000 levied under section 271FA for the belated statement of financial transactions.
• DCIT v ANI Integrated Services Ltd ITATHelps taxpayer
  My Tribunal order on employees' contributions became final before Checkmate and no appeal was filed. The department now wants it recalled under section 254(2). Is finality any answer?
  On this bench's view it is a complete answer. Once the order has attained finality between the parties and no lis is pending, a subsequent decision of a superior court cannot be a ground to recall or review it under section 254(2), and the Revenue's remedy was to have appealed to the High Court. The Revenue's miscellaneous application was dismissed.
• Orient Craft Ltd v DCIT ITATHelps department
  I withdrew my appeal against the section 143(1) intimation because the case went into scrutiny. Can the Assessing Officer now rectify under section 154 to bring back the intimation addition the scrutiny order left out?
  Yes, on these facts. The Delhi Bench of the Tribunal held that there was no merger of the section 143(1) intimation into the section 143(3) assessment, because the two orders proceeded on different issues, and that the intimation stood final once the assessee withdrew its appeal against it. The scrutiny order had started from the returned income instead of the income determined by the intimation, leaving the intimation's addition of Rs 12,82,64,760 out of the assessed figure. That, the Tribunal held, was a mistake apparent from the record, and the Assessing Officer was entitled to correct it under section 154.
• BNY Mellon International Operations (India) P Ltd v National e-Assessment Centre ITATHelps departmentNo later treatment found
  My PF due date fell on Independence Day and I remitted the next working day. Checkmate says nothing about that. Can I still save the deduction?
  No, not for a period after January 2016 and not where the remittance channel was internet banking. The five-day grace period under the EPF Manual of Accounting Procedure was withdrawn by the EPFO circular of 8 January 2016 with effect from the February 2016 remittance, and section 10 of the General Clauses Act does not help because the fund's designated internet banking account is open 24x7, so the recipient office cannot be said to have been closed on the holiday.
• ITO v Kalpesh Synthetics Pvt Ltd (miscellaneous applications) ITATHelps departmentOverruled
  I won my section 36(1)(va) appeal in the Tribunal before Checkmate. The department has now filed a miscellaneous application to recall the order. Can it do that?
  This bench held it can. Non-consideration of a Supreme Court decision is a mistake apparent from the record within section 254(2), and because a judicial decision operates retrospectively — the judge discovers the law rather than makes it — a decision handed down after the Tribunal's order can equally found a recall. Both favourable orders were recalled for a fresh hearing.
• Kalpesh Synthetics Pvt Ltd v DCIT, CPC ITATHelps taxpayerOverruled
  The CPC disallowed my late PF under section 143(1)(a) purely because my auditor filled in clause 20(b) of Form 3CD. Is the auditor's entry enough to found the adjustment?
  This order held it was not, and read down section 143(1)(a)(iv) so that an adjustment cannot be made where the audit report takes a stand contrary to the law laid down by the courts above. It is set out here because it is the most fully reasoned statement of that argument, but the reader must know at once that it no longer stands: it was recalled by the Tribunal itself under section 254(2) on 13 April 2023 and the appeals were re-decided against the assessee on 20 June 2023, following Checkmate Services.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.