Tribunal allows appeals, disallows ESI & PF contributions, remands 80C claim for reconsideration.

The Tribunal allowed both appeals of the assessee. The disallowance of employees' contributions to ESI & PF was deleted based on the clarifications provided by the Finance Act, 2021 amendments and the principles laid down by the jurisdictional High Court. The disallowance of the claim u/s. 80C was remanded for reconsideration by the AO, ensuring the relevant documents are taken into account.

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Issues:
1. Disallowance of employees' contributions to ESI & PF after the due date but before the filing date of return of income.
2. Disallowance of claim u/s. 80C of the Income Tax Act.

Issue 1 - Disallowance of employees' contributions to ESI & PF:
The appellant appealed against the CIT(A)'s order upholding the addition made by the AO. The Tribunal noted two main issues raised by the appellant: the deposit of employees' contributions to ESI & PF after the prescribed due date but before the filing date of the return of income, resulting in a disallowance, and the disallowance of the claim u/s.80C of the Act. The Tribunal referred to a previous decision where disallowances on similar grounds were deleted. The Tribunal highlighted that the Finance Act, 2021 amendments clarified the applicability of Section 43B and Section 36(1)(va) of the Act, which impacted the case. The Tribunal noted conflicting High Court decisions on the matter but emphasized the principle that a construction favoring the assessee should be adopted in case of ambiguity. Citing judgments from the jurisdictional High Court, the Tribunal concluded that the CIT(A)'s determinations were unsustainable, leading to the deletion of the disallowances made by the AO for the relevant assessment years.

Issue 2 - Disallowance of claim u/s. 80C:
Regarding the disallowance of the claim u/s. 80C of the Act, the appellant argued that relevant documents supporting the claim were filed but not considered by the authorities. The Tribunal found that the documents were overlooked and remanded the issue back to the AO for a fresh decision, ensuring the appellant's submissions are duly considered. The Tribunal allowed this ground raised by the appellant for statistical purposes. Consequently, the appeal was partly allowed, with the remaining part allowed for statistical purposes.

In conclusion, the Tribunal allowed both appeals of the assessee. The disallowance of employees' contributions to ESI & PF was deleted based on the clarifications provided by the Finance Act, 2021 amendments and the principles laid down by the jurisdictional High Court. The disallowance of the claim u/s. 80C was remanded for reconsideration by the AO, ensuring the relevant documents are taken into account.

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