2022 (8) TMI 384

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....11.2017 for assessment year 2015-16. Before us the assessee has assailed the impugned order on the following grounds of appeal: "1. On the facts and circumstances of the case, the CIT(A) has erred in sustaining the order of the A.O, wherein the A.O has erred in making disallowance of Rs.1,91,013/- out of employees contribution towards EPF/ESIC. The disallowance made by the A.O and confirmed by the CIT-A is unjustified, unwarranted and uncalled for. 2. The assessee reserves the right to add, amend or alter any grounds of appeal at any time of hearing." 2. Shorn of unnecessary details, the return of income filed by the assessee for the assessment year 2015-16 was thereafter assessed by the A.O u/s.143(3) of the Act, dated....

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.... in question had been deposited by the assessee prior to the "due date" of filing of its return of income, therefore, no disallowance of the same was called for u/s.43B of the Act. In support of his aforesaid contention the Ld. AR had pressed into service certain pronouncements/orders of various judicial forums. 7. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the authorities below. It was vehemently submitted by the Ld. DR that pursuant to insertion of 'Explanation-5' to Section 43B a/w. 'Explanation-1' to Section 36(1)(va) of the Act the legislature had made it abundantly clear that the delayed deposit of the employee's share of contribution towards welfare funds by the assessee would not be s....

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....r the issue as to whether or not the employees contribution to welfare funds falls within the scope and domain of Sec. 43B of the Act, we may herein draw support from the judgment of the Hon'ble High Court of Bombay in the case of CIT Vs. Hindustan Organic Chemicals Ltd in ITA No. 399/12, dated 11.07.2014. In the said case, the Hon'ble High Court of Bombay was, inter alia, called upon to answer the following substantial question of law that was raised in the appeal filed by the revenue:- "(A). Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal, in law, was right in allowing the claim of the Assessee on account of delayed payments of P.F. Of employees' contribution amounting to Rs.1,82,77,138/- b....

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....icability of the amendments that have been made available on the statue vide the Finance Act, 2021, i.e, "Explanation 5" to Section 43B and "Explanation 2" to Section 36(1)(va), i.e, as to whether those are applicable prospectively w.e.f A.Y 2021-22 onwards, or, are to be given a retrospective effect. Issue in hand is squarely covered by the order of a coordinate bench of the tribunal, i.e, ITAT, Amritsar in the case of Vinko Auto Industries Ltd. Vs. DCIT 2021 (12) TMI 636. In its aforesaid order, the Tribunal had after drawing support from the order of the ITAT, Hyderabad Bench in the case of the Value Momentum Software Services Pvt Ltd. Vs. DCIT in ITA No. 2197/Hyd/2017, dated 19.05.2021, had observed, that the amendments in section 36(1)....

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.... held that the assessee is entitled to claim deduction of employee's share of ESI & PF u/s.43B of the Act, if the same has been deposited prior to the filing of return of income u/s.139(1) of the Act. From the above judgments of the Hon'ble jurisdictional High Court, it is clear that the Hon'ble Court has not drawn any distinction between the employee's and employer's share qua PF & ESI contributions. Admittedly there are no contrary judgements of the jurisdictional High Court against the assessee on the aspect under consideration hence, first determination of the Ld. CIT(A) qua nonapplicability of the provisions of Section 43B of the Act to the employee's share qua PF & ESI, is unsustainable. 5.3 Now, coming to the second aspect/d....

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....d Rs.60,540/- for A.Y.2019-2020 made by the A.O. and confirmed by the CIT(A) are not sustainable and, hence, the same stands deleted." On the basis of our aforesaid deliberations, we are of the considered view, that as the amendments made available on the statue vide the Finance Act, 2021 i.e "Explanation 5" to Section 43B and "Explanation 2" to Section 36(1)(va) are applicable w.e.f 01.04.2021, i.e, from A.Y 2021-22 onwards, therefore, the same would not have any bearing on the case of the assessee before us, i.e, for A.Y 2011-12. Accordingly, drawing support from the aforementioned judicial pronouncements, we, herein conclude, that as the employees contributions to PF and ESI of Rs.2,88,976/-was deposited by the assessee before t....