Appeals Allowed for PF & ESI Deductions, COVID-19 Condonation, Section 43B Disallowance Verification

The appeals were allowed in ITA Nos. 52 & 44/KOL/2022, with deductions permitted for employees' contribution towards PF & ESI made before the return filing due date. Delay in filing the appeal was condoned due to the COVID-19 pandemic, and late fees for VAT returns were not pressed. In ITA No. 24/KOL/2022, the issue of disallowance under section 43B for employer's contributions was sent back for verification. The judgment clarified the prospective nature of the Finance Act, 2021 amendment to Section 36(1)(va) and directed proper verification of audit reports for deductions.

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Issues Involved:
1. Disallowance of employees' contribution towards PF & ESI.
2. Condonation of delay in filing the appeal.
3. Disallowance of late fees for delay in filing VAT returns.
4. Disallowance under section 43B of the Act for employer's contribution to PF, ESI, and GST payable.

Detailed Analysis:

1. Disallowance of Employees' Contribution towards PF & ESI
The common issue in all appeals was whether the assessees are entitled to deduction of employees' contribution towards PF & ESI paid before the due date of filing the return. The Tribunal referenced its decision in the case of Lumino Industries Ltd. vs. ACIT, which held that the amendment brought by Finance Act, 2021, to Section 36(1)(va) is prospective and not retrospective. Therefore, contributions made before the due date of filing the return are allowable as deductions. The Tribunal allowed the appeals of the assessees on this ground, holding that the disallowance made by the Assessing Officer was incorrect.

2. Condonation of Delay in Filing the Appeal
The appeal in ITA No. 44/KOL/2022 was time-barred by 27 days. The delay was condoned based on an affidavit citing the COVID-19 pandemic and the relaxation given in the limitation period by the Hon'ble Supreme Court. The appeal was admitted on merit.

3. Disallowance of Late Fees for Delay in Filing VAT Returns
In the case of Rajiv Sarkar (ITA No. 15/KOL/2022), Ground No. 5 pertained to the disallowance of late fees of Rs. 36,300/- paid for delay in filing VAT returns. The assessee did not press this ground due to the smallness of the amount, and it was dismissed as not pressed.

4. Disallowance under Section 43B of the Act for Employer's Contribution to PF, ESI, and GST Payable
In the case of Prakash Road Lines Corporation Limited (ITA No. 24/KOL/2022), Ground No. 4 related to the disallowance under section 43B for employer's contribution to PF, ESI, and GST payable, totaling Rs. 65,55,885/-. The assessee argued that there was an error in the original audit report, and the amounts were actually deposited before the due date of filing the return. The Tribunal restored the issue to the Assessing Officer to verify the documents and determine if the amounts were deposited on time. If satisfied, the disallowance would be uncalled for.

Conclusion:
- The appeals in ITA Nos. 52 & 44/KOL/2022 were allowed.
- ITA No. 15/KOL/2022 was partly allowed.
- ITA No. 24/KOL/2022 was partly allowed for statistical purposes.

The judgment emphasized that the amendment to Section 36(1)(va) by Finance Act, 2021, is prospective and not applicable to the assessment years in question. The Tribunal directed the Assessing Officer to allow deductions for contributions made before the due date of filing returns and to verify the correctness of the audit reports where discrepancies were noted.

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