TaxTMI 
TaxTMI 
2022 (2) TMI 640
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....allowing employees' contribution to PF & ESI, which was paid before the due date of filing of the return of income u/s. 139(1) of the I.T. Act. 3. Since common issue is raised in these appeals, they were heard together and are being disposed of by this consolidated order. 3.1. The facts relating to the issue are that for the assessment years under consideration, the returns of income was filed by the assessee, declaring income of Rs. 51,68,984 for A.Y. 2018-2019 and Rs. 63,70,362 for A.Y. 2019-2020. The assessee was served with an intimation u/s. 143(1) of the I.T. Act determining total income at Rs. 57,68,984, for A.Y. 2018-2019 and Rs. 66,37,014 for A.Y. 2019-2020. The reason for the difference between the returned income and th....
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....unal in the case 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. 1....
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....w, 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 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-sect....
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....onal High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT (supra) the assessee 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 ....