TaxTMI 
TaxTMI 
2022 (12) TMI 208
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.... the Finance Act, 2021. 4. The CIT(Appeals) has erred in having confirmed the disallowance of Rs. 10,18,881/- made by the AO/Asstt. Director of Income Tax, CPC u/s. 143(1)(a), on account of employee's contribution towards Provident Fund/ESI, which is outside the purview of section 143(1)(a), as the issue being highly debatable in view of divergent views of various courts/ITAT Benches because all the payments aggregating to Rs. 10,18,881/- were deposited before the due date of filing the return of income. The assessee craves leave to add to, alter or amend the above grounds of appeal before the same is heard or disposed of. 2. At the time of hearing Ld. AR invited attention to para 3.4 page 5 of the impugned order. Referring to the same it was his submission that the disallowance has been made by the Assessing Officer and sustained in appeal on the grounds that there was a late payment of PF/ESI. The disallowance was made under section 36(1)(va) of the Act. Referring to the record it was submitted that though the payment was late as per the specific Acts, however, it was made well before the filing of the return. This fact, it was submitted, would be evident....
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....tional 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 Co-ordinate 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 Resorts Pvt. Ltd. Dharamshala is given be....
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....rescent 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/DEL/2016 (A.Y. 2011-12) has held as....
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....-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 that the above amendment do not apply t....
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....ntroversy 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 Pvt. Ltd. (2014) 366 ITR 167....