9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 1282 - AT - Income TaxNon-deposit of the employees contribution towards PF/ESIC before the prescribed due dates - disallowance u/s 36(1) - HELD THAT - It is an undisputed fact that there has been slight delay in the deposit of employees contribution of PF and ESI by the assessee and the contribution have been deposited beyond the due date prescribed by the relevant authorities but at the same time it is also a fact that the amounts have been deposited with the appropriate authorities by the assessee before filing the return of income for the relevant assessment year. Co-ordinate Bench of Tribunal in the case of Indian Geotechnical Services 2021 (9) TMI 182 - ITAT DELHI has held that amendment made by Finance Bill 2021 shall take effect from 1st April 2021 and will accordingly apply to A.Y. 2021-11 and subsequent years. In the present case assessment year involved is 2018-19 and therefore following the aforesaid decision in the case of Indian Geotechnical Services (supra) amended provisions would have no application to the case under consideration. Before me Learned DR has relied on the decision in the case of Vedvan Consultants Pvt. Ltd. 2021 (8) TMI 1219 - ITAT DELHI . It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd. 1973 (1) TMI 1 - SUPREME COURT by the Hon ble Supreme Court - no addition u/s 36(1)(va) of the Act is called for in the present case. - Decided in favour of assessee.
Issues:
Disallowance of delayed deposit of PF/ESIC contribution under section 36(1)(va) of the Income Tax Act for Assessment Year 2018-19. Analysis: The appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi regarding the disallowance of delayed deposit of PF/ESIC contribution for the Assessment Year 2018-19. The assessee, an individual running a factory, declared total income at ?47,17,380/- for the year, which was revised to ?49,55,210/- by the CPC Bangalore due to a disallowance of ?2,37,823/- under section 36(1)(va) for non-deposit of employees' contribution towards PF/ESIC before the prescribed due dates. The assessee challenged this disallowance before the CIT(A), who upheld the AO's order based on the amendment made by the Finance Bill 2021. The grounds raised by the assessee in the appeal included challenges to the addition made by the Assessing Officer for delayed remittance of employee contributions towards ESI and PF under section 36(1)(va) of the Income Tax Act, questioning the CIT(A)'s reliance on the Finance Act 2021 amendment, and arguing that the contributions were deposited before the return of income was filed. The AR for the assessee contended that no disallowance was warranted under section 36(1)(va) as the contributions were eventually deposited with the authorities, citing relevant case law such as CIT vs. AIMIL Ltd. and decisions from the Punjab and Haryana High Court. The DR, representing the Revenue, supported the lower authorities' decision and emphasized that the Finance Act 2021 amendment aimed to remove doubts regarding such disallowances. The ITAT Delhi, after considering the arguments from both sides, observed that though there was a delay in depositing the contributions, they were eventually paid before filing the return of income. Citing precedents like CIT vs. AIMIL Ltd. and decisions from the Punjab and Haryana High Court, the ITAT held that no disallowance under section 36(1)(va) was warranted in such cases. Additionally, the ITAT clarified that the Finance Act 2021 amendment would not apply to the assessment year in question, as per the decision in Indian Geotechnical Services case, and directed the AO to delete the addition. The appeal of the assessee was allowed, and the order was pronounced on 29.10.2021.
|
