TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 216
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.... Income Tax Return. 3. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO (CPC) in making addition of Rs. 8,08,313/- u/s. 36(1)(va) of the Act even when the Ld. AO lacked powers to make such addition in the assessment order passed u/s. 143(1). 4. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in holding that the newly inserted explanation u/s. 36(1)(va) by Finance Act, 2021 is retrospective in nature basis even when the same was prospective and therefore was not applicable to the year in question. 5. That the appellant craves leave for any addition, deletion or amendment in the grounds of appeal on or before the disposal of the same. 2. The ld. AR drew specific attention to para 5.1 of the impugned order so as to highlight that the employees' contribution to PF and ESI was deposited well within the due date of filing of the return, however, in terms of the specific Act, there was a delay. In the circumstances, the Appellate Forum has dismissed the appeal relying upon the amendment of the Act which have been subject matter of consideration by the ITAT for many decisions of the Cha....
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....that the return was filed by the assessee within the due date as per the time limit as set out u/s. 139(1) of the Income Tax Act. Hence, the amount of the employees' contribution of the EPF amounting to Rs. 5,24,104/- stood paid before the filing of the return. It is seen that the disallowance made was sustained by Addl. Commissioner on account of the fact that the Amendments carried out by Finance Act 2021 in Sections 36(1)(va) and Sec. 43B were considered to be clarificatory, hence retrospective in nature. The said view has consistently been held to be incorrect by various orders of the ITAT as on a bare consideration of the Notes on Clauses appended to the Finance Bill it was clarified that the Amendment will take effect from the First April 2021. Thus, the legal position thereon is well settled. The Co-ordinate Benches have consistently right from order dated 03.08.2021 of the Delhi Benches in Insta Exhibitions Pvt. Ltd. Vs Addl. CIT, New Delhi in ITA No. 6941/Del/2017 and Hyderabad Benches vide order dated 01.07.2021 in M/s. Crescent Roadways Pvt. Ltd. V Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018 have held that the amendments are prospective and not retrospective in natu....
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....e Delhi High Court in case of CIT vs. M/s. Bharat Hotels Ltd. 410 ITR 417 wherein the issue is decided in favour of the revenue, without considering the decision of the Hon'ble Delhi High Court in case of CIT vs. AIMIL Ltd. (2010) 321 ITR 508 (Del.). But the Ld. AR relied upon the decision of the Hon'ble Delhi High Court In case of Pr. CIT vs. Pro Interactive Service (India) Pvt. Ltd. ITA No. 983/2018 pronounced on 10.09.2018 wherein the Hon'ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon'ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd. 82 ITR 192 by the Hon'ble Supreme Co....
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....ncome but beyond the due date prescribed Under the respective provident fund and ESI laws is not sustainable in law. 9. In the result, appeal of the assessee is allowed. 5. We further find that the Chandigarh Benches also consistently following the decisions of the jurisdictional High Court in the case of CIT Vs Nuchem Ltd. (ITA No. 323 of 2009) and CIT Vs Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167 have allowed similar claims of the assessee taking note of the fact the various Coordinate Benches have consistently held that the amendment to section 36(1)(va) and u/s. 43B of the Act effected by the Finance Act 2021 is applicable prospectively, reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, specifically stating the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Accordingly, considering the factual backdrop of the present case and considering the amendments in Section 36(1)(va) as well as Section 43B carried out by Finance Act, 2021 and Memorandum explaining the provisions in Finance Bill, 2021 we hold that the impugned disallowance is not sustainable and is directed to be deleted. The appeal....
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....he amendment being applicable in relation to assessment year 2021-22 and subsequent years. Accordingly, considering the factual backdrop of the present case and considering the amendments in Section 36(1)(va) as well as Section 43B carried out by Finance Act, 2021 and Memorandum explaining the provisions in Finance Bill, 2021 we hold that the impugned disallowance is not sustainable. Hence, the addition is directed to be deleted as the amount stood deposited by the due date as held in Section 139(1) of the Act. Hence, within time. The appeal of the assessee is allowed. Said order was pronounced in the presence of the parties via Webex." (emphasis supplied) 6. Accordingly, on account of the aforementioned reasoning, we hold that the disallowance of Rs. 5,24,104/- sustained in the present appeal by the CIT(A) qua the employees' contribution despite late payment qua the specific Act cannot be made. Admittedly, in the facts of the present case the payment has been made well within the time line as set out under the Income Tax Act u/s. 139(1) of the Income Tax Act. Thus, admittedly the return of income was filed well within time after making the specific payments. The position o....