2022 (1) TMI 1194 - AT - Income Tax

Late payments towards EPF and ESI under section 36(1)(va) - HELD THAT - Since the facts involved in the present case are identical to the facts involved in the case of Raja Ram Vs. ITO, Yamunanagar 2021 (11) TMI 370 - ITAT CHANDIGARH . So respectfully following the aforesaid referred to order of the Coordinate Bench of the Tribunal, the disallowances sustained by the Ld. CIT(A) are deleted. - Decided in favour of assessee.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Disallowance of contributions to Provident Fund (PF) and Employee State Insurance (ESI) under Section 36(1)(va) of the Income Tax Act, 1961.

Detailed Analysis:

1. Condonation of Delay in Filing the Appeal:
The appeal in ITA No. 138/Asr/2021 by M/s Amar Coach Builders was delayed by 10 days. The appellant cited technical faults in the website as the reason for the delay. The appellant referenced a Supreme Court order extending the period of limitation due to the COVID-19 pandemic. The Tribunal, after considering the submissions and the uncontested nature of the delay, condoned the delay, admitting the appeal for hearing.

2. Disallowance of Contributions to PF and ESI:
The primary grievance was the disallowance of ?6,11,928/- by the Assessing Officer (A.O.) for late payments towards EPF and ESI under Section 36(1)(va) of the Income Tax Act, despite the payments being made before the due date for filing the return of income under Section 139(1). The CIT(A) upheld the disallowance.

The appellant argued that the issue was covered by the ITAT, Chandigarh Bench's order in similar cases, where it was held that contributions deposited before the due date of filing the return should not be disallowed. The Tribunal noted that this issue had been consistently adjudicated in favor of the assessee by various ITAT benches, referencing several cases including Raja Ram Vs. ITO, Yamunanagar, and Sanchi Management Services Private Limited Vs. ITO, Chandigarh.

The Tribunal highlighted that the amendment to Section 36(1)(va) by the Finance Act, 2021, which clarified the due date for such contributions, was prospective and not applicable to the assessment year in question. Consequently, following the precedent set by the jurisdictional High Courts and other ITAT benches, the Tribunal deleted the disallowance.

Other Appeals (ITA No. 139/Asr/2021 and ITA No. 169/Asr/2021):
The facts in these appeals were similar to ITA No. 138/Asr/2021. The delays in filing these appeals were 18 and 17 days, respectively, and the amounts involved were ?2,36,896/- and ?26,14,264/-, respectively. Applying the same reasoning and legal precedents, the Tribunal condoned the delays and deleted the disallowances in these cases as well.

Conclusion:
The Tribunal allowed all the appeals, condoning the delays in filing and deleting the disallowances for late contributions to PF and ESI, as these were made before the due date for filing the returns of income under Section 139(1). The Tribunal's decision was consistent with the precedents and the interpretation of the relevant provisions of the Income Tax Act prior to the amendment by the Finance Act, 2021.