Tribunal rules in favor of assessee on PF & ESI contributions, citing Finance Act 2021 amendment.

The Tribunal allowed the appeals of the assessee, directing the AO to delete the additions made on account of delayed payment of employees' contribution towards PF & ESI. The Tribunal held that the Finance Act, 2021 amendment was prospective and could not unsettle the settled legal position upheld by the jurisdictional High Court for the relevant assessment years of 2019-20 and 2017-18. The decision was based on previous Tribunal rulings and in line with the judgment of the Hon'ble Calcutta High Court.

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Issues:
Confirmation of addition made by AO on account of delay in payment of employees' contribution towards PF & ESI before filing of return u/s. 139(1) of the Income-tax Act, 1961.

Analysis:

1. Issue of Delayed Payment of Employees' Contribution:
The appeals were filed against separate orders of Ld. CIT(A) regarding the addition made by the AO on account of delayed payment of employees' contribution towards PF & ESI. The Ld. AR argued that the Finance Act, 2021 amendment is not applicable in this case, citing a previous Tribunal decision. The Ld. CIT(A) confirmed the additions, but the AR contended that the issues in all appeals are res-integra, relying on a High Court decision and the Tribunal's order. The Ld. DR supported the CIT(A)'s action.

2. Tribunal's Decision:
After hearing both parties and examining the records, the Tribunal noted that the central issue in all appeals was the confirmation of additions made by the CIT(A) on account of delayed payment of employees' contribution towards PF & ESI. It was undisputed that the assessee had remitted the contributions before filing the return u/s. 139(1) of the Act. The Tribunal reiterated that the Finance Act, 2021 amendment was prospective in nature based on a previous decision. As the relevant assessment years were 2019-20 and 2017-18, the Tribunal held that the amendment brought in by the Finance Act, 2021 could not unsettle the settled legal position upheld by the jurisdictional High Court. Therefore, the Tribunal allowed the appeals of the assessee and directed the AO to delete the additions in all three appeals.

3. Conclusion:
In conclusion, the Tribunal allowed all the appeals of the assessee, emphasizing that the Finance Act, 2021 amendment did not apply retrospectively to unsettle established legal positions. The decision was based on previous Tribunal rulings and in line with the judgment of the Hon'ble Calcutta High Court. As a result, the additions made by the AO on account of delayed payment of employees' contribution towards PF & ESI were directed to be deleted.

This detailed analysis covers the key issues and the Tribunal's decision regarding the delayed payment of employees' contribution towards PF & ESI in the mentioned legal judgment.

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