Tribunal rules in favor of assessees, directs deletion of disallowed amount under section 36(1)(va).

The Tribunal allowed appeals by different assessees against the CIT(A)'s orders for AY 2019-20. The disallowance under section 36(1)(va) for late deposit of employees' share of PF and ESIC was contested. Despite the appellant's absence, citing judicial precedents and recent legislative amendments, the Tribunal ruled in favor of the assessees. The Tribunal directed the Assessing Officer to delete the disallowed amount, leading to the allowance of both appeals.

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Issues:
Appeals by different assessee against orders of CIT(A) for AY 2019-20. Disallowance of Rs.11,80,623 under section 36(1)(va) regarding late deposit of employees' share of PF and ESIC. Appellant's absence during hearing. Judicial precedent favoring assessee's deduction claim.

Analysis:
The judgment pertains to appeals filed by different assessees against the orders of the CIT(A) for the assessment year 2019-20. The primary issue in both appeals is the disallowance of Rs.11,80,623 under section 36(1)(va) of the Income Tax Act, 1961, concerning the late deposit of employees' share of PF and ESIC. Despite due notice, the appellant did not appear during the hearing. The Tribunal considered a recent decision in a similar case where the issue was decided in favor of the assessee. The Tribunal referred to the decision of the Hon'ble Himachal Pradesh High Court in CIT vs. Nipso Polyfabriks Ltd., which held that both employees' and employer's contributions should be allowed as deductions if deposited before the due date.

The Tribunal highlighted that the Finance Act, 2021, inserted an explanation under section 36(1)(va), which would be effective from April 1, 2021, and would not apply to the assessment year 2019-20 under consideration. Citing the decision in CIT vs. Ghatge Patil Transports Ltd., the Tribunal held that the judicial precedents supported allowing the deduction claimed by the assessee. Consequently, the Tribunal directed the Assessing Officer to delete the addition of Rs.11,80,623 made under section 36(1)(va) of the Act. As a result, the appeal filed by the assessee in ITA No.672/PUN/2021 was allowed.

Since the facts and issues in both appeals were identical, the decision in ITA No.672/PUN/2021 for AY 2019-20 was applied mutatis mutandis to the appeal in ITA No.674/PUN/2021 for the same assessment year, leading to the allowance of the latter appeal as well. In conclusion, both appeals filed by the different assessees were allowed by the Tribunal.

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