TaxTMI 
TaxTMI 
2022 (4) TMI 1680
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.... well as the relevant material available on record, we found all these cases that the employees contribution to provident fund and ESI in the respective appeals was although paid after the due date of their payments under the relevant statute but was paid by the assessee before the due date of filing of the return of income u/s. 139(1) of the Act. This issue has also been settled by the coordinate bench of the Tribunal in the case of Rukmani Infra Projects Ltd., ITA No.358/CTK/2017, order dated 30.03.2022, wherein the Tribunal has deleted the addition made on account of delay in deposit of employees contribution to PF and ESI after observing as under:- 7.9 To decide the above ground, it is prudent to refer to the amendment in Finance Bill 2021, the amendments are made in section 36 & 43B vide clause 8 & 9. In this regard attention is invited towards section 1(2)(a) of Finance Act, 2021 wherein it has specifically mentioned "(2) Save as otherwise provided in this Act-. (a) section 2 to 88 shall come into force on the first day of April 2021". Relating to the amendment by Finance Act 2021, Memorandum Explaining the Provisions of Finance Bill, 2021 says regarding amendment in....
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....rious locations are pronounced on this issue, brief synopsis and finding on the issue are as under: i) Jagmohan Singh Vs DCIT (ITAT Chandigarh), Appeal Number: ITA Nos. 185 & 193/Chd/2021, Date of Judgement/Order: 15/12/2021 HELD THAT:- It is not in dispute that employees‟ contribution to ESI and PF collected by the assessee from its employees had been deposited well before the due date of filing of return of income u/s 139 (1) of the Act. We find that the issue is squarely covered by the decisions of the Hon'ble Rajasthan High Court, Hon'ble Himachal Pradesh High Court as well as Hon'ble Punjab & Haryana High Court. We further note that though the Id. CIT(A) has not disputed the various decisions of Hon'ble High Courts including the decision of the jurisdictional Himachal Pradesh High Court but has referred to the amendment brought in by the Finance Act, 2021. It is a consistent position across various Benches of the Tribunal including Chandigarh Benches that the amendment which has been brought in by the Finance Act, 2021 shall apply w. e. f. assessment year 2021 - 22 and subsequent assessment years and the impugned assessment year being assessment year 20....
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....preme Court an amendment made to a taxing statute can be said to be intended to remove hardship only of the assessee and not of the Department. Imposing of a retrospective levy on the assessee would be caused undue hardship and for that reason Parliament specifically chose to make the proviso affective from a particular date. In the present case also, the amendment brought out by Finance Act, 2021 w.e.f. 01.04.2021 i.e. for and from assessment year 2021-22 of Explanation-2 to s. 36(1)(va) of the Act and not retrospectively. Thus, from the above, it is clear that the amendment brought in the statute i.e., by Finance Act, 2021, the provisions of Section 36(1)(va) r.w.s. 43B of the Act amended by inserting Explanation 2 is prospective and not retrospective. Hence, the amended provisions of Section 43B r.w.s. 36(1)(va) of the Act are not applicable for the assessment year 2018-19 but will apply from assessment year 2021-22 and subsequent assessment years. Hence, this issue of assessee's appeal is allowed iv) Pachouli Wellness Clinic LLP Vs ITO (ITAT Delhi), Appeal Number : ITA No: 999/Del/2021, Date of Judgement/Order : 25/11/2021 HELD THAT:- As decided in PLANMAN HR ....
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....de in PF and ESI if not made within the due date as prescribed by the respective statutes (PF and ESI Act). So after the amendment has been inserted according to Shri Miraj D Shah takes effect from 1st April, 2021 i.e AY 2021-22 and subsequent assessment year and if the 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 Shri Vijayshree 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 employees‟ contribution if made by an assessee before the due date of filing of return of income u/s 139(1) of the Act, is allowable as a deduction. We note that by Finance ....
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....egislative intent is clear, the amendment brought in by Finance Act, 2021 on this issue as discussed is prospective and Ld. CIT(A) erred in holding otherwise. So till AY 2021-22, the Jurisdictional High Court‟s view in favor of assessee will hold good and is binding on us. As discussed the decision of the Hon'ble Delhi High Court in Bharat Hotels Ltd. (supra) which was in favor of revenue has not considered the decision of the Co-ordinate Division Bench decision in M/s Aimil Ltd.(supra) which is in favour of assessee. So we note that later decision of the Delhi/Hyderabad Tribunal have followed the decision favouring assessee in the light of the Hon'ble Supreme Court decision in M/s Vegetable Products (supra). In the light of the aforesaid decision and relying on the ratio of the Hon'ble Supreme Court in the case of Vatika Township Pvt. Ltd. (supra) and M/s Snowtex Investment Ltd. (supra) and also taking note of the binding decision of the Hon'ble Jurisdictional Calcutta High Court on this issue before us in Shri Vijayshree Ltd. Ltd.(supra), M/s Philips Carbon Black Ltd.(supra), M/s Coal India Ltd.(supra), M/s Akzo Nobel India Ltd. (supra), we set aside the impugned order of L....
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....09/2021; xxii) Chodavaram Vs. ADIT, ITA No.25&28/VIZ/2021, order dated 23/09/2021; xxiii) S.V.Engineering Constructions India (P) Ltd. Vs. DCIT, ITA No.130/VIZ/2021, order dated 23/09/2021. 7.12 Moreover, it would be significant to refer to the SLP by the revenue filed before the Hon'ble Apex Court in the case of M/s Rajasthan State Beverages Corporation Ltd., reported on 84 Taxman.com 185 [04.07.2017] wherein the SLP of revenue arising out of the order passed by the Hon'ble Rajasthan High Court in the case of M/s Rajasthan State Beverages Corporation Ltd., in ITA No.150/2016, order dated 04.08.2016, is dismissed by the Hon'ble Apex Court. Held That : Amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va); SLP dismissed. 7.13 On perusal of the above judgments in favour of the assessee and other quoted by the Ld DR in contrast. Having two opposite opinions on the same issue, it is a moot question that which view should be appreciated. To reach on a judgment on the controversy under this ground in absence of a direct finding ....
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....y, in view of various judgments in the favour of assessee, disallowance could not be made in respect of PF/ESI paid within the due date of filing return of income. Therefore, it is directed to delete the disallowance made for delayed remittance of employee's contribution to EPF for Rs. 59,30,423/-, consequently, the appeal of the assessee is allowed to this extent. 4. In addition to the observation of the coordinate bench in the above matter, reliance can also be placed on the following decisions :- 1. [2022] 136 taxmann.com 244 (Delhi - Trib.), IN THE ITAT DELHI BENCH 'G', Raj Kumar v. ITD, CPC, Bengaluru, IT APPEAL NOS. 1392, 1383 & 1384(DELHI) OF 2021 & ORS. [ASSESSMENT YEAR 2019-20], FEBRUARY 28, 2022, wherein it is held that:- INCOME TAX : FA2021 amendments regarding due date of deposit of employee's contribution to PF/ESI, are prospective w.e.f. AY 2021-22 * For AYs prior to 2021-22, deduction of employee's contribution to PF/ESI is to be allowed if same is paid on or before due date of filing ITR * For assessment years prior to Assessment Year 2021-22, where PF and ESI dues are paid after due date under respective statut....
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....e applicable prospectively in relation to Assessment Year 2021-22 and subsequent years. Therefore, the claim of deduction of contribution to Employee's State Insurance Scheme (ESI) and Provident Fund u/s. 36(1)(va) could not be denied to the assessee in Assessment Year 2017-18 in question on the basis of amendments made by Finance Act, 2021. For this proposition, we find support from the decision of the Co-ordinate Bench of Tribunal in the case of The Continental Restaurant and Café Company v. ITO [2021] 91 ITR (Trib.)(S.N.) 60 (Bang.) and Adyar Ananda Bhavan Sweets India (P.) Ltd. v. ACIT [2022] 134 taxmann.com 56 (Chennai - Trib.). Consequently, the action of revenue on this score is set aside and cancelled. 10. In the result, the appeal of the assessee is allowed. 3. [2022] 136 taxmann.com 147 (Jabalpur-Trib) IN THE ITAT, JABALPUR BENCH Haylide Chemicals (P.) Ltd. v. Deputy Commissioner of Income-tax* IT APPEAL NO. 51 (JAB) OF 2021 [ASSESSMENT YEAR 2017-18] JANUARY 13, 2022, wherein it is held that :- Section 43B, read with sections 36(1)(va) and 139, of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only....
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....was delay in deposition of same by assessee as per Explanation to section 36(1)(va) - Whether no disallowance could be made for assessment years prior to assessment year 2021-22 as per amendment to section 36(1)(va) brought by Finance Act, 2021 which came into effect from 1-4-2021 as same has no retrospective applicability - Held, yes - Whether therefore, addition made by way of adjustment towards deposit of employees' contribution towards ESI and PF paid before due date of filing of return of income under section 139(1) was to be deleted - Held, yes [Para 6] [In favour of assessee] 5. We have also gone through the observation of the Agra Bench of the Tribunal in a recent case in the case of Agra Karam Udhog, Agra vs J.A.O., Dy. CIT, dated 22 March, 2022 ITA No. 62/Agr/2021 AND OTHERS. In all the above case a similar view has been taken by distinguished benches of the Tribunal that disallowance on account of delayed payment of ESI and PF under relevant statute, but remitted before due date of filing of return of income under section 139(1) can not be made, hence decided in favour of assessee. 6. Now, to decide the applicability of the amendment in section 36(i)(a) and 43B....
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....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 applied the provision of section 43B on employee contribution as well. There is a distinction between employer 40 contribution and employee's contribution towards welfare fund. It may be noted that employee's contribution towards welfare funds is a mechanism to ensure the compliance by the employers of the labour welfare laws. Hence, it needs to be stressed that the employer's contribution towards welfare funds such as ESI and PF needs to be clearly distinguished from the employee's contribution towards welfare funds. Employee's contribution is employee own money and the employer deposits this contribution on behalf of....
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....of M/s Rajasthan State Beverages Corporation Ltd., in ITA No.150/2016, order dated 04.08.2016, is dismissed by the Hon'ble Apex Court. Held That : Amount claimed on payment of PF and ESI having been deposited on or before due date of filing of returns, same could not be disallowed under section 43B or under section 36(1)(va); SLP dismissed. 9. The disputed controversy in the present case has been answered accordingly and the dispute which is for the assessment year 2020-21 and before is decided in favour of the assessee. The AO is directed accordingly to delete the additions made for delayed remittance of employee's contribution to PF / ESI after the due date under respective statutes but paid before the due date of filing of return of income u/s 139(1) of the income tax act. 10. Looking to the similar facts and circumstances in the present appeals for the respective assessment years under consideration i.e. A.Ys.2017-2018, 2018-2019 & 2019-2020, wherein it is not disputed that the payment of employees contribution to PF and ESI was made before filing of the return u/s. 139(1) of the Act, therefore, following the above decision of the Tribunal in the case of Rukmani Infra Pro....