Assessee's Appeal Allowed: ESIC & PF Payments Timely, Not Disallowed

The appeal by the assessee was allowed by the Tribunal. The Tribunal held that the addition of Rs. 3,35,951 for belated remittance of employees' share of ESIC and PF should not be disallowed under section 43B of the Income-tax Act as the payments were made before the due date of filing the return of income. The Tribunal emphasized that the amended provision could not be applied retrospectively and no disallowance could be made for PF/ESI payments made within the due date of filing the return of income.

---

---

Issues involved:
1. Addition of Rs. 3,35,951 towards belated remittance of employees' share of ESIC and PF under section 43B r.w.s. 36(1)(va) of the Income-tax Act.

Detailed Analysis:
The appeal was against the order of the CIT(Appeals) regarding the addition of Rs. 3,35,951 for belated remittance of employees' share of ESIC and PF. The assessee contended that the payments were made before the due date of filing the return of income u/s. 139(1) and should be allowable under section 43B of the Act. The Tribunal referred to a similar case where it was held that if the payment is made before the due date of filing the return of income, it cannot be disallowed under section 36(1)(va) of the Act (Para 6).

The Tribunal also cited a judgment by the Hon'ble Karnataka High Court, emphasizing that the deduction for payment of tax under section 139 of the Act can be claimed if the payment is made on or before the due date applicable for submitting returns of income (Para 8).

Furthermore, the Tribunal referred to various judgments supporting the view that the Employees' Contribution should not be covered by section 43B, especially considering the explanatory notes in the Finance Act 2021. The Tribunal concluded that the amended provision could not be applied retrospectively and no disallowance could be made by the AO for PF/ESI payments made within the due date of filing the return of income (Para 12).

In conclusion, the Tribunal allowed the appeal of the assessee based on the above analysis and judgments referred to, stating that no disallowance could be made for PF/ESI payments made within the due date of filing the return of income, even if they were beyond the date mentioned in the respective Act (Para 12).

Therefore, the appeal by the assessee was allowed based on the detailed analysis and legal interpretations provided by the Tribunal, following the principles established in the cited judgments and relevant provisions of the Income-tax Act.

---