TaxTMI 
TaxTMI 
2022 (5) TMI 606
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....ses, the Supreme Court vide miscellaneouos Application no. 665/2021 in SMW ( c ) No. 03/2020, restored its order dated 23.03.2020 and 08.03.2021 (whereby limitations were extended originally ) and further suspended limitation under general or special laws in respect of all judicial or quasi-judicial proceedings till further orders under article 142 read with article 141 and listed the matter for 19.07.2021. Thereby, effectively, limitation stands suspended from 15.03.2020. That, again Hon'ble Supreme Court, vide order dated 10.01.2022 in MA no. 21 of 2022 restored its original order whereby limitation period was extended and further extended period upto 28.02.2022. Thus, it is submitted that the delay in filling the appeal is absolutely inadvertent and has occurred due to circumstances beyond the control of assessee. It was further submitted that the assessee has always acted bondfide and the delay is of only 233 days. The application has also filed an affidavit to that effect and requested to condone the delay in filling this appeal. 4. We have heard the ld. counsel for the assessee as well as the ld. DR. The Ld. DR has not objected to the facts placed on record and left the de....
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....nder the specified act but before due date of filing of return of income U/s 139(1) of the Income Tax Act, 1961 (in short, the Act). 8. The assessee filed its return of income on 17.10.2019 which was processed u/s 143(1) of the Act whereby an adjustment was made on account of disallowance of claim of deduction with respect to employees' contribution towards PF and ESIC deposited after the due date specified under the respective Act. During the course of assessment proceedings, the CPC, Bangalore made disallowance of Rs.1,25,496/- on account of late deposit of employees contribution towards PF/ESI as prescribed under the respective act but before due date of filling return of income. The assessee challenged the said adjustment before the ld. CIT(A)/NFAC and contended that as per the binding precedents if the payment is made even though belatedly but before due date of filing of return of income U/s 139(1) of the Act then as per provisions of Section 43B of the Act, no disallowance can be made. The ld. CIT(A)/NFAC did not accept this contention of the assessee and confirmed the disallowance by considering the amendment in Section 36(1)(va) of the Act whereby an explanation (2) as ....
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....clause (x) of clause (24) of section 2 applies." 4.2 Thus, the Finance Act, 2021, has amended section 36 of the Income-tax Act, relating to other 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 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" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. By virtue of newly inserted Explanation 2 to clause (va) of sub-section (1) of the said section the provisions of section 43B shall not apply ....
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....engaluru/ ACIT, Circle- 1, Kota (ITA No.46/JP/2022) praying that the addition so sustained by the ld. CIT(A)/NFAC amounting to Rs.1,25,496/- may kindly be deleted. 12. On the other hand, the ld. DR supported the orders of the lower authorities and submitted that the since the law is changed the amount is not allowable. 13. We have heard both the parties and perused the materials available on record. The Bench noted during the course of hearing that the AO made an addition of Rs.1,25,496/-on account of late deposit of employees PF & ESI by the assessee under the prescribed act but before the due date of filling the return of income u/s 139 of the Act. It is further observed that the ld. CIT(A)/NFAC has confirmed the action of the AO holding that the sum of Rs.1,25,496/- being employees contribution to PF/ESI has been paid late under that Act and thus the addition made by the CPC deserves to be upheld. The Bench has taken into consideration its various orders wherein similar issue has been decided in favour of the assessee on the very same issue. Recently, the similar issue of late deposit of employees PF/ESI contribution by the assessee but paid the same before due date of fil....
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....re res integra in light of series of decisions rendered by the Hon'ble Rajasthan High Court starting from CIT vs. State Bank of Bikaner & Jaipur (supra) and subsequent decisions. 15. In this regard, we may refer to the initial decision of Hon'ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur wherein the Hon'ble High Court after extensively examining the matter and considering the various decisions of the Hon'ble Supreme Court and various other High Courts has decided the matter in favour of the assessee. In the said decision, the Hon'ble High Court was pleased to held as under: "20. On perusal of Sec.36(1)(va) and Sec.43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exi....
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....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." 16. The said decision has subsequently been followed in CIT vs. Jaipur Vidyut Vitran Nigam Ltd. (supra), CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (supra), and CIT vs Rajasthan State Beverages Corporation Limited (supra). In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act. 17. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon'ble Rajasthan High Court but has decided to follow the decisions rendered by the Hon'ble Delhi, Madras, Gujarat and Kerala High Courts. Given the divergent views taken by the various High Courts and in ....
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....nishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon'ble Karnataka High Court. The next aspect to be considered is whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also. On this aspect, we find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in the earlier paragraph of this order on identical issue the tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act in both the Assessment Years deserves to be deleted." 7. In light of the aforesaid discussions ....
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.... shall take effect from 1st April 2021 and will accordingly apply to A.Y. 2021-11 and subsequent years. In the present case assessment year involved is 2018-19 and therefore following the aforesaid decision in thecase of Indian Geotechnical Services (supra), I am of the view that the amended provisions would have no application to the case under consideration. Before me, Learned DR has relied on the decision of Co-ordinate Bench of Tribunal in the case of Vedvan Consultants Pvt. Ltd. (supra). 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 Court. I therefore following the decision of High Courts cited hereinabove and the decision of the Co-ordinate Bench of Tribunal, I am of the view that no addition u/s 36(1)(va) of the Act is called for in the present case. Therefore I direct the AO to delete the addition. Thus the ground of assessee is allowed.'' Thus, it is clear that the Delhi Benches of the Tribunal has considered the earlier decision of the Tribunal in the case of Vadvan Consultants Pvt. Ltd. (su....