Tribunal overturns PF & ESI payment delays, citing prospective Finance Act 2021 amendment. The Tribunal allowed all appeals, emphasizing the prospective nature of the Finance Act, 2021 amendment. The orders confirming additions due to delayed ...
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The Tribunal allowed all appeals, emphasizing the prospective nature of the Finance Act, 2021 amendment. The orders confirming additions due to delayed payment of employees' contribution towards PF & ESI were overturned. The Tribunal held that the amendment could not be retroactively applied to the relevant assessment years of 2019-20 and 2018-19. The AO was directed to delete the additions in all appeals, following settled legal principles and previous decisions.
Issues: Appeals against orders of Ld. CIT(A)-NFAC regarding delay in payment of employees' contribution towards PF & ESI.
Analysis:
Issue 1: Delay in payment of employees' contribution towards PF & ESI The appeals were filed against the orders of Ld. CIT(A)-NFAC confirming additions made by AO due to delayed payment of employees' contribution towards PF & ESI. The Ld. AR argued that the Finance Act, 2021 amendment is not applicable as it is prospective, citing a Tribunal decision in a similar case. The Ld. DR supported the Ld. CIT(A)'s decision. The Tribunal noted the issue in all appeals and the amounts added in each case. It was undisputed that the assessee remitted the contributions before filing returns under section 139(1) of the Income-tax Act, 1961. Referring to a previous Tribunal decision, the Tribunal held that the Finance Act, 2021 amendment is prospective and cannot be applied to unsettle settled law. As the relevant assessment years were 2019-20 and 2018-19, the amendment could not be retroactively applied. The Tribunal followed its previous decision and the decision of the Hon'ble Calcutta High Court, directing the AO to delete the additions in all appeals.
Conclusion: The Tribunal allowed all appeals of the assessee, emphasizing the prospective nature of the Finance Act, 2021 amendment and the settled legal position. The orders of Ld. CIT(A)-NFAC confirming the additions were overturned, and the AO was directed to delete the additions in all five appeals.
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