TaxTMI 
TaxTMI 
2022 (2) TMI 1477
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....e crux of the issue is that: "The Ld. CIT (A), NFAC, Delhi has erred in confirming the disallowance of expenditure incurred towards payment made for employees' contribution to PF & ESI though they were remitted in the Government Treasury within the due date of filing the income tax return." 3. Before us at the time of hearing none appeared on behalf of the assessee to represent the case. 4. At the outset, We find the issue is settled by the Memorandum Explaining the Provisions in Finance Bill, 2021 wherein it is stated that amendment to section 36(1)(va) and section 43B of the Act will take effect from 1/4/2021. The relevant portion of the Memorandum is extracted herein below for reference. Rationalisation of various Provisions "Pay....
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....9;s contribution is covered in clause (b) of section 43B. According to it, if any sum towards employer's contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees is actually paid by the assessee on or before the due date for furnishing the return of the income under sub-section (1) of section 139, assessee would be entitled to deduction under section 43B and such deduction would be admissible for the accounting year. This provision does not cover employee contribution referred to in clause (va) of sub-section (1) of section 36 of the Act. Though section 43B of the Act covers only employer's contribution and does not cover employee contribution, some courts have appl....
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....pplied to a sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section 2 applies. These amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years." 5. In the case of the assessee it is not disputed that the employee's contribution of Rs. 14,04,162/- was deducted by the assessee and remitted in the Government Treasury within the due date of filing the return of income under the Income Tax Act, 1961. Since the case of the assessee relates to assessment year 2019-20 and the amendment though clarificatory in nature has come into effect from 1/4/2021, for the relevant year under consideration it woul....