TaxTMI 
TaxTMI 
2021 (10) TMI 870
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.... 2. The learned AO has made a disallowance of expenditure in respect of Employee Contribution to Specified Funds The Learned AO failed to take into consideration the following case laws which are passed by the jurisdictional High Court of Karnataka where the assessee is assessed. a. Essae Teroaka Pvt. Ltd. v. DCIT, Karnataka High Court ITA No. 480/2013 dated 4th February, 2014. b. CIT v. Sabari Enterprises (2008) 298 ITR 141 (Kar.) c. Spectrum Consultants India (P) Ltd. v. CIT (2013) 34 taxmann.com 20 (Kar.) The other case-laws where similar cases are assessed in favour of the assessee on similar issues are as under: d. CIT v. Aimil Ltd. (2010) 321 ITR 508 (Del) e. CIT v. Kichha ....
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....he fact that these legislative amendments incorporated in section 36(1)(va) and 43B by Finance Act 2021, are prospective in application i.e., w.e.f. April 1, 2021. The disallowance and the amendments are prospective as has been held by Hon. Income Tax Appellate Tribunal, Hyderabad in the case of Crescent Roadways Private Limited [TS-510-ITAT 2021 (HYD)] 5. The appellant assessee craves leave to add, alter, amend or to delete any of the grounds of appeal on or before hearing of appeal, and to file written submissions and paper book at the time of actual hearing before the Hon'ble CIT(Appeals)." 3. The brief facts of the case are as follows: The assessee is a company engaged in the business of manufacture of gear boxes etc.....
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....Acts, failing which the assessee/employer losses the benefit of deduction. The CIT(A) in holding so, also placed reliance on the amendment brought by the Finance Act, 2021 to section 36(1)(va) and 43B of the I.T. Act. 5. Aggrieved, the assessee has filed this appeal before the Tribunal. The learned AR relied on the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT reported in 366 ITR 408 (Kar.). The learned AR submitted that the amendment to section 36(1)(va) and 43B of the I.T. Act by Finance Act, 2021 is clarificatory and does not apply for the relevant assessment year. In this context, the learned AR relied on the following orders of the Tribunal:- (i) Dhabriya Polywood Limit....
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.... in law, the Tribunal was justified in affirming the finding of Assessing Officer in denying the appellant's claim of deductions of the employees contribution to PF/ESI alleging that the payment was not made by the appellant in accordance with the provisions u/s. 36(1)(va) of the I.T. Act?" 7.1. In deciding the above substantial question of law, the Hon'ble High Court rendered the following findings:- "20. Paragraph-38 of the PF Scheme provides for Mode of payment of contributions. As provided in sub para (1), the employer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fun....
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.... in the case of M.M. Aqua Technologies Limited v. CIT reported in (2021) 436 ITR 582 (SC) had held that retrospective provision in a taxing Act which is "for the removal of doubts" cannot be presumed to be retrospective, if it alters or changes the law as it earlier stood (page 597). In this case, in view of the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT (supra) the assessee would have been entitled to deduction of employees' contribution of PF and ESI if the payment was made prior to due date of filing of the return of income u/s. 139(1) of the I.T. Act. Therefore, the amendment brought about by the Finance Act, 2021 to section 36(1)(va) and 43B of the I.T. Act, alters the posit....