TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 76
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....ncome Tax Act, 1961 ('the Act' hereinafter) vide Intimation dated 25/02/2020. 2. At the very outset, it was submitted by Sh. Gugalia, one of the partners of the assessee-firm, duly authorized, that the only issue in appeal is the disallowance of the employee's contribution to the Employee Provident Fund and Employee State Insurance Fund on account of its delayed deposit with the prescribed authority, u/s. 36(1)(va) of the Act, even as the same has been within the due date of filing the return of income for the relevant assessment year. The first appellate authority has, ignoring a number of decisions in its favour cited by the assessee before it holding of no disallowance being exigible under the circumstances, proceeded to confirm the dis....
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....e qua condonation is self-speaking, to which Sh. Halder could not furnish any satisfactory response. This Tribunal is in regular receipt of matters where the assessee's contend of delay in furnishing documents on account of non/malfunctioning of the Revenues' e-portal. The explanation, supported by material, is reasonable, and the delay is accordingly condoned. 4.2 Coming to the merits of the case, it is an admitted fact that the impugned contributions are the employee's (as opposed to employer's) contributions to the relevant employee welfare fund and, thus, covered u/s. 2(24)(x) r/w s. 36(1)(va), as against s. 37(1) r/w s. 43B(b) and, two, the same stands deposited with the prescribed authority under the relevant Act by the due date of f....
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....3B(b), implying, in context, u/s. 37(1) r/w s. 43B(b), which were aplenty, it opined, could be validated only by disregarding the clear language of the relevant provisions, upheld constitutionally and not read down. The said decisions must nevertheless be respected, and no adjustment contrary thereto could be made u/s. 143(1); there being no decision by the Hon'ble jurisdictional High Court in the matter. The only manner, therefore, available for the Revenue to effect an adjustment u/s. 143(1)/154, is where the Explanations to section 36(1)(va) and s. 43B(b) inserted by Finance Act, 2021, which attempt to resolve the issue of the employee's contribution to the employee welfare funds being governed by section 43B(b), i.e., to the exclusi....
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....e., for the said limited purpose, to find that the view canvassed by or on the assessee's behalf could be sustained only by ignoring the existence of s. 36(1)(va) - which governs the deductibility of the employees' contribution to the employee welfare funds, on the statute book - clearly, an impermissibility. Another fundamental infirmity in the assessee's argument is in regarding the employee's contribution, deemed by the legal fiction of s. 2(24)(x) as the assessee-employer's income, as an expense deductible u/s. 37(1), which could be so only where it is not recoverable - an impossibility, as the said deeming applied only on receipt thereof, again bringing s. 36(1)(va) into play for its deduction, and which would therefore have to be give....
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....l continued, had however been, as clear from a reference to the Notes on the Clauses to, and the Memorandum explaining the Provisions of, the Finance Bill, 2021, reproducing the same, proposed as prospective amendments. The amendments by way of Explanation 5 to s. 43B and Explanation 2 to s. 36(1)(va), it concluded, are to therefore take effect only from AY 2021-22, and which view is unmistakable on a plain reading of the said documents. Decision 5.1 The impugned order is completely silent on, and there is no reference therein either to the said Explanations or if the same are retrospective, concerning itself only with the merits of the impugned additions, impermissible u/s. 143(1) in view of the conflict of judicial opinion and the absen....