2022 (9) TMI 873 - AT - Income Tax

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 ... Delayed employees’ share of PF and ESIC etc - late deposit of the Employees’ share of PF and ESIC - Amount paid before due date for filing Return of Income under the provisions of section 139(1) - HELD THAT:- As identical issue has been decided in recent decision of Co-ordinate Bench of this Tribunal in the case of Prashant Arun Sangai [2022 (6) TMI 1305 - ITAT PUNE] wherein, the Tribunal decided the issue in favour of the assessee.as held position of law as set out by various Hon’ble High Courts including the one in CIT vs. Nipso Polyfabriks Ltd. [2012 (11) TMI 592 - HIMACHAL PRADESH HIGH COURT] squarely applies to the facts and circumstances of the instant case, thereby not warranting any disallowance since the amount in question was admittedly deposited before due date u/s 139(1) of the Act. The addition is therefore, directed to be deleted. - Decided in favour of assessee. 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.