Tribunal: Section 36(1)(va) Amendment Not Retroactive

The Tribunal allowed the appeal, holding that the amended provisions of Section 36(1)(va) r.w.s. 43B of the Act are not applicable for A.Y. 2018-19 but will apply from A.Y. 2021-22 onwards. The decision was based on the clarification provided by the Finance Act 2021, ensuring the prospective nature of the amendment.

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Issues:
1. Disallowance of employee's contribution to PF & ESI.
2. Applicability of amended provisions of section 36(1)(va) r.w.s. 43B of the Act.

Analysis:

Issue 1: Disallowance of employee's contribution to PF & ESI
- The assessee, a private limited company, filed its return of income for A.Y. 2018-19, with the CPC processing it u/s 143(1) determining total income differently.
- The CPC disallowed a sum for late payment of Employee PF and ESI contributions.
- The CIT(A) held that late payments of employees' contributions are to be added to the assessee's income.
- CIT(A) relied on judicial decisions and the Finance Bill 2021 clarifying the provisions of section 36(1)(va).

Issue 2: Applicability of amended provisions of section 36(1)(va) r.w.s. 43B of the Act
- The assessee appealed the CIT(A)'s order, arguing that the late payments were made before the due date of filing the return u/s 139(1) of the Act.
- The assessee cited a jurisdictional ITAT order supporting their claim.
- The Tribunal considered the amendment brought by the Finance Act 2021, clarifying the applicability of Section 43B despite belated payments.
- The Tribunal noted that the amendment is prospective and not retrospective, applying from A.Y. 2021-22 onwards.
- The Tribunal ruled in favor of the assessee, allowing the appeal.

In conclusion, the Tribunal allowed the appeal, holding that the amended provisions of Section 36(1)(va) r.w.s. 43B of the Act are not applicable for A.Y. 2018-19 but will apply from A.Y. 2021-22 onwards. The decision was based on the clarification provided by the Finance Act 2021, ensuring the prospective nature of the amendment.

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