TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1149
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....ny adjudication . 3. The issue raised in ground nos. 2 to 4 involved in this appeal of assessee is against the action of the Ld. CIT(A) confirming the disallowance made qua PF & ESI in respect employee's contribution u/s. 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961 (hereinafter referred to as the "Act") of Rs.51,73,980/-. 4. At the outset, the Ld. AR of the assessee pointed out that this issue raised by the assessee is no longer res integra. According to the authorities below, since the assessee has not remitted the employees' contribution on or before the due date as prescribed by the PF & ESI Act, the contribution made belatedly cannot be allowed. However, according to the assessee, since the assessee has undisputedly made the....
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.... remittance of PF/ESI Employees' Contribution is not made within the time prescribed by the PF/ESI Act then the remittance cannot be allowed as a deduction which is prospective in operation. Whereas according to Ld. CIT(A), the amendment brought in is clarificatory in nature so, retrospective in operation. So we have to adjudicate this issue whether the amendment brought in by Finance Act, 2021 is prospective or retrospective in operation. We note that before this amendment has been inserted by Finance Bill, 2021, the Hon'ble Jurisdictional Calcutta High Court in the case of ShriVijayshree Ltd. Ltd.(supra), M/s Philips Carbon Black Ltd.(supra), M/s Coal India Ltd.(supra), M/s Akzo Nobel India Ltd. (supra) has held that the payment of employ....
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.... (supra) the Hon'ble Supreme Court held that the notes on clauses appended to the Finance Bill will throw light as to the legislative intent; because it has to be borne in mind that Parliament/legislature is aware of three concepts before an amendment is brought in, which can be discerned from reading of the "Notes on Clauses" to the Bill which are (i) prospective amendment with effect from a fixed date; (ii) retrospective amendment with effect from a fixed anterior date; and (iii) clarificatory amendments which are retrospective in nature. So when we adjudicate whether the view of LdCIT(A) that the explanation 2 brought in by Finance Act, 2021 is retrospective, let us look at the "Notes on Clauses and the relevant clauses 8 & 9 of the Fina....
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....t the AO to allow the claim of deduction in respect of employees contribution shares towards ESI, PF, by the assessee before the due date of filing of return u/s 139(1) of the Act. Therefore the appeal of assessee succeeds and so, it is allowed in favour of assessee. 5. Therefore, in the light of the above judicial precedent (supra), we are inclined to allow the appeal of the assessee and direct the A.O. to delete the addition and hold that the Amendment brought in Finance Act 2021 w.e.f. 01.04.2021 by inserting an Explanation to section 36(1)(va) and section 43B of the Act is prospective in nature and would apply from AY 2021-22 onwards.Consequently ground no. 2 to 4 are allowed. 6. The issue raised in ground no. 5 is against the order ....
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....t aside the order of Ld. CIT(A) on this issue and direct the AO to delete the disallowance. 9. The issue raised in ground no. 7 is against the order of Ld. CIT(A) confirming the addition of Rs. 12,420/- as interest on TDS which has been disallowed by the AO on the ground that the same is not allowable u/s 37 of the Act as the interest on Govt. liability is not permissible and preliminary in nature. 10. After hearing the rival parties and perusing the material on record, we find that the interest on delayed payments of TDS is an expense which is incurred wholly and exclusively for the purpose of business as the interest has been paid on delayed payment of TDS which was the liability of the assessee. Accordingly we set aside the order of th....