TaxTMI 
TaxTMI 
2022 (2) TMI 428
X X X X Extracts X X X X
X X X X Extracts X X X X
....aised for assessment year 2018-2019 (ITA No. 674/Bang/2021):- "1. The order of the Learned Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), passed under Section 250 of the Act is opposed to law, equity, weight of the evidence and facts of the Appellant's case. 2. The learned NFAC is not justified in upholding the disallowance of Rs. 9,14,808/- pertaining to deduction claimed by the appellant under Section 36{1}{va} read with Section 43B with respect to the employees' contribution to provident fund which was credited to the employees' account in the relevant fund after the due date specified under the provisions of the relevant fund/law but before the date of filing of the return of income under th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....laim of deduction relating to employees contribution. 8. The appellant craves leave to add, amend, alter, omit or substitute any of the grounds on or before hearing of the appeal." 3. The brief facts of the case are as follows: For the assessment years under consideration, the returns of income were filed by the assessee, declaring income of Rs. 1,05,75,080 for A.Y. 2018-2019 and Rs. 1,04,92,470 for A.Y. 2019-2020. The assessee was served with intimation u/s. 143(1) of the I.T. Act determining total income at Rs. 1,14,89,880 for A.Y. 2018-2019 and Rs. 1,16,97,510 for A.Y. 2019-2020. The reason for the difference between the returned income and the income determined u/s. 143(1) of the I.T. Act was on account of disallowance of Rs. 9,14,8....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of M/s. Shakuntala Agarbathi Company Vs. DICT in ITA No. 385/Bang/2021 (order dated 21.10.2021). 6. The learned Departmental Representative supported the orders of the Income Tax Authorities. 7. We have heard the rival submissions and perused the material on record. On identical facts, the Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT (supra) by following the dictum laid down by the Hon'ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd. Vs. DCIT (supra), had held that the assessee would be entitled to deduction of employees' contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s. 139(1) of the I.T. Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 fund or the fund under the ESI Act within fifteen days of the closure of every month pay. It is clear that the word "contribution" used in Clause (b) of Section 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under sub-section (1) of Section 139 of the IT Act is made, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sessee would have been entitled to deduction of employees' contribution to 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 position of law adversely to the assessee. Therefore, such amendment cannot be held to be retrospective in nature. Even otherwise, the amendment has been mentioned to be effective from 01.04.2021 and will apply for and from assessment year 2021-2022 onwards. The following orders of the Tribunal had categorically held that the amendment to section 36[1][va] and 43B of the Act by Finance Act, 2021 is only prospective in nature and not ret....