TaxTMI 
TaxTMI 
2022 (5) TMI 1025
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.... amount of Rs. 31,00,186/- u/s. 36(i)(va), while processing the return vide order u/s. 143 dated 10.05.2020, on account of payment of employees contribution beyond the due date as prescribed under the relevant Act because the amendment by Finance Bill 2021 is prospective and not retrospective as held by the Chandigarh/Ahmadabad bench of the ITAT and CIT(A), National Faceless Appeal Centre, Delhi in various cases and the CIT(A) has acted against the principles of judicial consistency as laid down by Apex Court. 3. The Ld. CIT(A)-3 Gurgaon erred on facts and law in confirming the action of the AO of disallowing the amount of Rs. 31,00,186/- u/s. 36(i)(va) on account of payment of employees Contribution beyond the due date as prescribed under the relevant Act while processing the return vide order u/s. 143(1) dated 10.05.2020 because the adjustment made by AO is out of ambit of the provisions of Sc 143(1) as the issue is debatable and it is settled principles of law that no adjustment can be made u/s. 143(1) in case of debatable issue. 4. The Ld. CIT(A)-3 Gurgaon has dismissed the appeal of the assessee without rebutting the case laws and contentions raised during th....
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....at this issue has been considered by the jurisdictional High Court in the case of CIT Vs Hemla Embroidery Mills (P) Ltd. (2014) 366 ITR 167(P&H). The jurisdictional High Court relying upon its own decision in the case of CIT Vs Rai Agro Industries 334 ITR 122 and considering the principle laid down by the Apex Court in the case of CIT Vs Alom Extrusions Ltd. 319 ITR 306 (S.C.) have addressed the legal position, though it need be clarified that the decision rendered was in the context of amendments carried out by way of Second Proviso to Section 43B which was omitted by Finance Act, 2003. This Amendment was held to be clarificatory and hence would operate retrospectively. In the facts of the present case, Amendment by way of Explanation 2 to Section 36(va) and Explanation 5 to Section 43B by Finance Act, 2021 had been held to be having prospective effect. For the said purposes relying upon the Notes on Clauses at the time of introduction of the Finance Bill, 2021, the Coordinate Benches have consistently held that the said amendments have been inserted w.e.f. assessment year 2020-21 assessment year. For ready reference, relevant extract from ITA No. 194/CHD/2021 in the case of Surya....
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....vide order dated 01.07.2021 in M/s. Crescent Roadways Pvt. Ltd. v. Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018. We find that the issue has been elaborately discussed by the Co-ordinate Benches for example in Insta Exhibitions Pvt. Ltd. (supra) as under: 6. We have carefully considered contentions of the learned departmental representative and perused the orders of the lower authorities. The facts shows that the assessee has collected the sum of Rs. 12,16,260/- being employee's contribution under the provident fund and with respect to ESI laws. The above contribution was admittedly not deposited by the assessee within the due date prescribed under the respective ESI and PF statue however, 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 DOT Vs Dee Development Engineers in ITA No. 4959....
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....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. It is proposed to insert Explanation 2 to clause (va) of sub-section (1) of the said section so as to clarify 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 the said clause. This amendment will take effect from 1st April, 2021. And will accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years." Therefore it is apparent th....
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.... is no longer res-integra. The controversy whether the Amendments carried out by the Finance Act, 2021 in Section 36(1)(va) and u/s. 43B of the Act were prospective in nature or retrospective, hence clarificatory in nature have been put to rest by consistent orders of the different Benches of the ITAT namely order dated 03.08.2021 in Insta Exhibitions Pvt. Ltd. Vs Addl. CIT, New Delhi in ITA No. 6941/Del/2017 of the Delhi Benches; order dated 01.07.2021 of Hyderabad Benches in M/s. Crescent Roadways Pvt. Ltd. v. Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018, order dated 27.08.2021 in the case of M/s. Jupiter Aqua Lines Pvt. Ltd. Vs DCIT ITA 83/CHD/2021 and order dated 04.10.2021 in the case of Ajay Piplani Vs Assistant Director of Income Tax, CPC, Bengaluru in ITA No. 114/CHD/2021 of the ITAT Chandigarh Benches. Reference may also be made to various other orders of the Chandigarh Benches in ITA 250/CHD/2021 in the case of Shri Sukhdev Singh, Mohali and ITA 255/CHD/2021 in the case of M/s. CZAR FAUCETS Ltd. Chandigarh wherein consistently following the decisions of the jurisdictional High Court in the case of CIT Vs Nuchem Ltd. (ITA No. 323 of 2009) and CIT Vs Hemla Embroidery Mills ....