2022 (2) TMI 1263

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....acts of the case and law applicable to it. 2. The learned Commissioner of Income Tax (Appeals) erred in confirming the disallowance of Rs.11,05,657/- invoking the provisions of section 143(1)(a)(ii) of the act, holding that the said amount is assessable under the provisions of section 36(1)(va) of the act. 3. The learned Commissioner of Income Tax (Appeals) erred in ignoring the fact that, the issue involved was disputed and in the light of ratios laid down by Karnataka High Court and also the Hon'ble Supreme Court, the provisions of section 143(1)(a)(ii) of the act could not have been invoked and no adjustment U/s.143(1) of the act could have been made. 4. The learned Commissioner of Income Tax (Appeals) erred in ignoring the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Road Transport Corporation (2014) 41 Taxmann.com 100 (Gujarat) (iii) Unifac Management Services (India) Pvt Ltd (2018) 100 Taxmann.com (Madras) (iv) Merchem Ltd 61 Taxmann.com 119 (Kerala) 7. The learned Commissioner of Income Tax (Appeals) erred in relying on the Board Circular No.22/2015. dated 17.12.2015 ignoring the fact that, circular issued are not binding on the appellant and also appellate authorities, all the more so when there are contrary decisions by High Courts and also Supreme Court. 8. The learned Commissioner of Income Tax (Appeals) erred in following Explanation-2 below provisions of section 36(1)(va) of the act and also Explanation-5 below provisions of section 43B of the act ignoring the position of law that,....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pectively would not have retrospective application and hence cannot be applied to A.Y.2019-20. 12. The learned Commissioner of Income Tax (Appeals) has erred in not following the ratio laid down by Delhi Tribunal in the case of Maksat Technologies (P) Ltd V. Deputy Commissioner of Income Tax, Circle - 16(1), New Delhi (2021) 130 Taxmann.com 454 (Delhi-Trib), wherein it is held that, the disallowance U/s.36(1)(va) of the act cannot be made under the provisions of section 143(1) of the act for the reason that, the contributions were not remitted within the due date of the relevant enactments, but before the due date for filing the return of income. PRAYER The appellant prays that the Hon'ble Tribunal to kindly delete the addition....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....er's contribution and held insofar as the employees' contribution to ESI and PF, the same need to be remitted within the due date as mentioned in the respective Acts. The CIT(A) also relied on the amendment brought about to section 36(1)(va) and 43B of the I.T.Act. 4. Aggrieved, the assessee has filed this appeal before the Tribunal. 4.1 The Ld.AR submitted that an identical issue is decided in favour of the assessee by the coordinate Bench of this Tribunal in following cases: * M/s.The Continental Restaurant & Café Co. v. ITO in ITA No.388/Bang/2021 (order dated 11.10.2021) * M/s. Nirmal Enviro Solutions Pvt. Ltd. vs. DCIT in ITA No. 315/Bang/2021 (order dated 12.10.2021) * Shri Gopalkrishna Aswini Kumar vs. ACIT i....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Assessing Officer in denying the appellant's claim of deductions of the employees contribution to PF/ESI alleging that the payment was not made by the appellant in accordance with the provisions u/s 36(1)(va) of the I.T.Act?" 7.1 In deciding the above substantial question of law, the Hon'ble High Court rendered the following findings:- "20. Paragraph-38 of the PF Scheme provides for Mode of payment of contributions. As provided in sub para (1), the employer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fund or the fund under the ESI Act within fifteen days of the closure of ev....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d that retrospective provision in a taxing Act which is "for the removal of doubts" cannot be presumed to be retrospective, if it alters or changes the law as it earlier stood (page 597). In this case, in view of the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT (supra) the assessee would have been entitled to deduction of employees' contribution of PF and ESI if the payment was made prior to due date of filing of the return of income u/s 139(1) of the I.T.Act. Therefore, the amendment brought about by the Finance Act, 2021 to section 36(1)(va) and 43B of the I.T.Act, alters the position of law adversely to the assessee. Therefore, such amendment cannot be held to be retrospective i....