TaxTMI 
TaxTMI 
2022 (3) TMI 1310
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....No. 25/JP/2022 Jairaj ITBA/NFAC/S/250/2021 -22/1037786558(1) 14/12/2021 5. ITA No. 26/JP/2022 Jairaj ITBA/NFAC/S/250/2021-22/1037786855(1) 14/12/2021 6. ITA No. 28/JP/2022 The Earth House Resorts LLP ITBA/NFAC/S/250/2021-22/103720000(1) 24/11/2021 2. Since the issues involved are common in all the above appeals and the appeals were heard together, therefore, these are being disposed off by this common order for the sake of convenience and brevity. 3. As a lead case, for deciding the appeals, we take ITA No. 18/JP/2022 for the A.Y. 2018-19 wherein following grounds have been raised by the assessee. "1. In the facts and circumstances of the case and in law, ld. CIT(A), has erred in confirming the action of the ld. AO, in making adjustments in the intimation under Section 143(1) which are outside the purview of Section 143(1)(a). The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the entire disallowance of Rs. 5,61,32,750/-. 2. In the facts and circumstances of the case and in law, ld. CIT(A), has erred in confirming the action of the ....
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.... to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. 23. Thus, we are of the view that where the PF and/or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under Section 36(1 )(va) of the IT Act" * CIT vs.Jaipur Vidyut Vitran Nigam Ltd. [2014] 49 taxmann.com 540 ( Rajasthan) [PB 34-35] "6. In our view no substantial question of law arises out of the orders of the Tribunal as it is an admitted fact that the entire amount was deposited by the respondent-assessee at least on or before the due date of filing of the returns under s. 139 of the IT Act and being a concurrent finding of fact by the respective authorities and in the light of the judgments rendered by this Court in the case of CIT v. State Bank of Bikaner & Jaipur/ Jaipur Vidyut Vitran Nigam Ltd. [2014] 363 ITR 70/43 taxmann.com 411 of even date wherein it has been held that if the amount ha....
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....ect claim of deduction u/s 36(1)(va) of the Act. The ld. CIT(A) observed that it is not in dispute that appellant's ROI itself shown the delay in payments of Employee's contribution to PF/ESIC amounting to Rs. 5,61,32,750/- within the "due date" prescribed as per Explanation 2 Section 36(1)(va) and that by virtue of deeming provision of Section 2(24)(x) r.w.s 36(1)(va) of the Act, deduction was not admissible to the appellant for Rs. 5,61,32,750/- based on the ROI and the information contained therein. Hence, the AO rightly invoked provisions of S.143(1)(a)(ii) of the Act and made the adjustment for such incorrect claim made by the appellant. He also observed that the decision of Hon'ble Kolkata High Court in the case of Mintri Tea Co. is of no help as the facts of the current case indicate inadmissible deduction on the face of ROI and the information accompanying it. Moreover, the decision of Mintri Tea Co.was in the context of AY prior to AY 2008-09 and that the provisions of S.143(1) underwent substantial change w.e.f 01.04.2008. 9. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us. The Ld. AR for the assessee at the time of hearing submitted t....
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....TA No. 132/JP/2021 dated 15.11.2021 (Jaipur-Trib.) * M/s Mohanlal Khatri vs. ACIT in ITA No. 144/JP/2021 dated 29.11.2021 (Jaipur-Trib.) 12. On the other hand, the ld. CIT-DR only relied on the order of ld. CIT(A) and stated that ld. CIT(A) has passed exhaustive order explaining the provisions of the Act. 13. We have considered the rival contention and perused the orders of the authorities and the material available on record. Admitted facts of the present case are that the payments of PF & ESI contribution relating employee's contribution are before the due date of filing of return of income U/s 139(1) of the Act. We have noted that the issue under consideration is covered by the decision of the Coordinate Bench in case of M/s Mohanlal Khatri vs. ACIT in ITA No. 144/JP/2021 order dated 29.11.2021 (Supra) wherein it is held as under:- "7. I have considered the submissions of both the parties and perused the material available on record. In the present cases, it is noticed that an identical issue having similar facts has already been adjudicated by the ITAT, Jodhpur Bench in the aforesaid referred to cases, wherein one of us is author of the order dated 27/09....
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....to ESI and PF by invoking the provision of Section 36(1)(va) read with Section 2(24)(x) of the Act was correct or not. It appears that the Tribunal below, in view of the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., reported in 2009 Vol.390 ITR 306, held that the deletion was justified. Being dissatisfied, the Revenue has come up with the present appeal. After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Alom Extrusion Ltd., we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the Sec 43(B) of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April, 1988. Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no substantial question of law is involved in this ....
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....irected to be deleted therefore." 10. On an identical issue, this Bench of the Tribunal vide order dated 12.8.2021 in the case of Mohangarh Engineers and Construction Company, Jodhpur & Others vs CPC, Banglore in ITA No. 5/Jodh/2021 and others held vide para 13 to 18 as under:- "13. We have heard the rival contentions and perused the material available on record. On perusal of the details submitted by the assessee as part of its return of income, it is noted that the assessee has deposited the employees's contribution towards ESI and PF well before the due date of filing of return of income u/s 139(1) and the last of such deposits were made on 16.04.2019 whereas due date of filing the return for the impugned assessment year 2019- 20 was 31.10.2019 and the return of income was also filed on the said date. Admittedly and undisputedly, the employees's contribution to ESI and PF which have been collected by the assessee from its employees have thus been deposited well before the due date of filing of return of income u/s 139(1) of the Act. 14. The issue is no more res integra in light of series of decisions rendered by the Hon'ble Rajasthan High Court startin....
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....olete. Accordingly, contention of counsel for the revenue is not tenable for the reason aforesaid that deductions out of the gross income for payment of tax at the time of submission of return under Section 139 is permissible only if the statutory liability of payment of PF or other contribution referred to in Clause (b) are paid within the due date under the respective enactments by the assessees and not under the due date of filing of return. 22. We have already observed that till this provision was brought in as the due amounts on one pretext or the other were not being deposited by the assessees though substantial benefits had been obtained by them in the shape of the amount having been claimed as a deduction but the said amounts were not deposited. It is pertinent to note that the respective Act such as PF etc. also provides that the amounts can be paid later on subject to payment of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. 23. ....
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....itions made by the Assessing Officer and sustained by the Ld. CIT(A) on account of deposits of employees contribution of ESI & PF prior to filing of the return of income u/s 139(1) of the Act, in both the years under consideration prior to the amendment made by the Finance Act, 2021 w.e.f. 1.4.2021 vide Explanation 5, are deleted. 8. Since the facts involved in the present case are identical to the facts involved in the case of Mohangarh Engineers and Construction Company Vs. DCIT (supra) and in the case of Bikaner Ceramics Private Limited, Bikaner Vs. ADIT, CPC, Bangaluru (supra). So respectfully following the aforesaid referred to order, the disallowances sustained by the Ld. CIT(A) are deleted." 14. A similar issue has been decided by the Hon'ble Delhi High Court in the case of CIT vs. AIMIL Ltd., (2010) 321 ITR 508 wherein it has been held as under:- "The deletion with effect from April 1, 2004 by the Finance Act, 2003 of the second proviso to section 43B of the Income-tax Act, 1961, which stipulates that contributions to the provided fund and Employees State Insurance Fund should be made within the time mentioned in section 36(1)(va), that is, the time all....
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....ining the provisions are reproduced as under:- "Rationalisation of various Provisions Payment by employer of employee contribution to a fund on or before due date Clause (24) of section 2 of the Act provides an inclusive definition of the income. Sub-clause (x) to the said clause provide that income to include any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees. Section 36 of the Act pertains to the other deductions. Sub-section (1) of the said section provides for various deductions allowed while computing the income under the head 'Profits and gains of business or profession'. Clause (va) of the said sub-section provides for deduction of any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation to the said clause provides that, for the purposes of this clause, "due date" to mean the date ....
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....o never have been applied for the purposes of determining the 'due date‖ under this clause; and (ii) amend section 43B of the Act by inserting Explanation 5 to the said section to clarify that the provisions of the said section do not apply and deemed to never have been applied to a sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section 2 applies. These amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years." 16. The present appeal is filed by the assessee against disallowance of Rs. 5,61,32,750/- pertaining to employees contribution made towards ESI & PF which was paid by the appellant company after the "due date" under respective statute of ESIC/PF. This disallowance was made by the AO under section 143(1) of the Act on the basis of remarks in the relevant column of Form no. 3CD report attached with the return of income. In the appeal petition, the appellant has stated that total income returned at Rs. 24,87,27,450/- has been processed at Rs. 30,48,60,200/- after making adjustment u/s. 143(1)(a)(ii) for Rs. ....
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....e decision in the case of M/s AIMIL Ltd., it is noted that the said decision is based on the decision of Hon'ble Supreme Court in the case of M/s Vinay Cement Ltd. I find that the decision in the case of Vinay Cements Ltd. by the Hon'ble Gauhati High Court was on the issue of section 43B(b) i.e. pertaining to employers contribution and not the employee's contribution toward PF/ESIC. The Hon'ble Gauhati High Court has also taken note of the deletion of second Proviso to section 43B of the Act brought by finance Act 2003 with effect from 01/04/2004. Prior to this Amendment by Finance Act 2003, even the employers contribution as per clause (b) of section 43B was to be allowed only if the payments were made within the "due date" as specified in the explanation below section 36(1)(va) of the Act. It was in the context of this amendment that the Hon'ble Gauhati High Court has held that the said second proviso could be considered to be never in existence and accordingly the decision in favour of appellant was given for the issues pertaining to deduction u/s 43B(b) i.e. employers contribution. As the Hon'ble Supreme Court dismissed the SLP of the Revenue, the decisi....
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....rt to support their reasoning. In the current discussion herein above, it is noted that most of the later decisions applying the Apex Court's decision in the case of Vinay Cements Ltd. or Alom Extrusions Ltd. fall in the category of sub- silentio which have no binding force as held in the case of A-One granite vs. State of UP (2001 AIR SCW 848). Even the provision of Section 36(1)(va) was amended vide Finance Act, 2021 by inserting Explanation 2, which reads as under :- For the removal of doubts, it is hereby clarified that the provisions of Section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the "due date" under this clause. The above explanation sets to rest the controversy pertaining to allowability of deduction in respect of employees' contribution to PF/ESIC under section 43B of the Act. The Explanation 2 inserted by Finance Act, 2021 emphasizes that section 43B was never deemed to have applied for the purposes of due dates as under section 36(1)(va) of the Act. On the issue of clarificatory amendments, the Honble Supreme Court had occasion to analyse the issue in detail in the case of CIT vs Gold....
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....ot to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. The law passed today cannot be applied to the events of the past. The Hon'ble Supreme Court held that if somebody does something today, he do it keeping in view the law of today and in force and not tomorrow's backward adjustment of it. According to Hon'ble Apex court every human being is entitled to arrange his affairs by relying on the existing law and should not find that his plans have been retrospectively upset. This principle of law is known as lex prospicit non respicit, which means law looks forward not backward. In the case of Vatika Township Pvt. Ltd., (Supra), the issue under challenge before Hon'ble Supreme Court was the insertion of proviso to section 113 of the Act by the Finance Act 2002 for charging of surcharge. Hon'ble Supreme Court noted that though provision for surcharge under the Finance Acts have been in existence since 1995, the charge of surcharge with respect to block assessments, having been created for the first time by the insertion of proviso to Section 113 of the Act, by Finance Act, 2002, it is clearly a substantive pr....
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.... (e) There is yet another very interesting piece of evidence that clarifies the provision beyond any pale of doubt, viz. understanding of CBDT itself regarding this provision. It is contained in CBDT circular No.8 of 2002 dated 27th August, 2002, with the subject "Finance Act, 2002 - Explanatory Notes on provision relating to Direct Taxes". This circular has been issued after the passing of the Finance Act, 2002, by which amendment to Section 113 was made. In this circular, various amendments to the Income Tax Act are discussed amply demonstrating as to which amendments are clarificatory/retrospective in operation and which amendments are prospective. For example, explanation to Section 158BB is stated to be clarificatory in nature. Likewise, it is mentioned that amendments in Section 145 whereby provisions of that section are made applicable to block assessments is made clarificatory and would take effect retrospectively from 1st day of July, 1995. When it comes to amendment to Section 113 of the Act, this very circular provides that the said amendment along with amendments in Section 158BE, would be prospective i.e. it will take effect from 1st June, 2002. (f) F....