2022 (4) TMI 168

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.... confirming the disallowance of employees' contribution to ESI and EPF. Brief facts are that assessee filed return of income declaring income of Rs. 15,11,425/- and the same was processed under Section 143(1) of the Income Tax Act, 1961 (the Act) on 30.03.2019 determining the income of the assessee at Rs. 31,99,450/-. CPC while processing the return u/s. 143(1) disallowance of Rs. 16,88,048/- on account of employees' contribution to ESI and EPF was made. Rectification petition under Section 154 of the Act was filed by the assessee on 27.06.2019, which was rejected by the CPC by order dated 26.08.2019. The assessee filed appeal before the ld. CIT (Appeals) contending that employees' contribution to ESI and EPF filed before the due date for f....

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....8) (Delhi HC); (c) M/s. Aroon Facilitation Management Services Pvt. Ltd. (ITA. 1824/Del/2020 dated 13.10.2021) (ITAT, Delhi); (d) Insta Exhibitions Pvt. Ltd. Vs. Addl. CIT (ITA. 6941/Del/2017 dated 03.08.2021) (ITAT, Delhi); (e) DCIT Vs. Planman HR (P) Ltd. (ITA. 5152/Del/2017 dated 15.07.2021) (ITAT, Delhi); (f) M/s. Crescent Roadways Private Limited Vs. DCIT (ITA. 1952/Hyd/2018 dated 01.07.2021) (ITAT, Hyd.); (g) Mahadev Cold Storage Vs. Jurisdictional Assessing Officer (ITA.Nos.20/Agra/2021 & Ors. dt.14.6.2021) (ITAT Agra); (h) DCIT Vs. M/s. Talentpro India HR Pvt. Ltd. (ITA.265/Chny/2019 dated 9.04.2021) (ITAT, Chennai); (i) DCIT Vs. Dee Development Engineers Ltd. (ITA.4959/....

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....owever, same was deposited before the due date of filing of return of income. Therefore, the ld AO as well as the ld CIT(A) disallowed the same holding that such contribution becomes the income of the assessee under the provision of section 2(24)(x) of the Act and thereafter if the same is deposit within the due date prescribed under the respective laws then same is allowable as deduction u/s 36(1)(va) of the Act. Coordinate bench in case of DCIT Vs Dee Development Engineers in ITA No. 4959/DEL/2016 ( A.Y 2011-12) has held as Under:- "7. We have heard both the parties and perused all the relevant material available on record. As regards Ground No. 1, the assessee company has not deposited the employees' contribution within the due ....

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....e argument of the learned departmental representative that amendment made with finance act 2021 wherein explanation 1 is added u/s 36 (1) (va) of the act with effect from 1 April 2021, is applicable to the present case, we referred to the "Notes on clauses" at the time of introduction of the finance bill 2021 which says as Under:- "Clause 8 of the Bill seeks to amend section 36 of the Income-tax Act, relating toother deductions. Sub-section (1) of the said section provides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deduction for any sum received by the assessee from any of his employe....