9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 568 - AT - Income TaxLate payment of Employees contribution towards EPF/ESI by invoking the provision of Section 36(1)(va) - as per assessee all the amounts have been deposited with the appropriate authorities before filing of return of income by the assessee - Diversified views - HELD THAT - We find that the various Benches of the Tribunal at Delhi and other Tribunal have held that the delayed deposits of PF ESIC before the date of filing of return is an allowable expenditure and for which reliance was placed on the decision of Hon ble Delhi High Court in the case of AIMIL Ltd 2009 (12) TMI 38 - DELHI HIGH COURT . DR on the amendment brought out by Finance Act 2021 is concerned, notes on clauses to the Finance Bill 2021 clearly states that the amendment will take effect from 1st April 2021 and will apply in relation to the assessment year 2021-22 and subsequent assessment year. In such a situation, we are of the view that the amendment brought out by Finance Act 2021 does not apply to the assessment year under consideration. 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 no disallowance u/s 36(1)(va) of the Act is warranted in the present case. We therefore direct the AO to delete the addition. Thus the assessee s ground is allowed.
Issues Involved:
- Appeal against order of Commissioner of Income Tax (Appeals) relating to Assessment Years 2018-19 & 2019-20. - Addition under section 36(1)(va) for delay in deposit of Employees’ contribution towards EPF/ESI. - Applicability of judgments and amendments in determining disallowances. - Violation of principles of natural justice in making additions without prior opportunity. - Interpretation of provisions regarding due date for deposit of PF/ESIC contributions. - Effect of Finance Act 2021 amendment on the assessment year under consideration. Analysis: Issue 1: Appeal against CIT(A) order The appeals filed by the assessee were directed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Years 2018-19 & 2019-20. The issue involved in both appeals was deemed identical, leading to the decision to dispose of both appeals by a consolidated order, referencing the facts for A.Y. 2018-19. Issue 2: Addition under section 36(1)(va) The primary issue revolved around the addition under section 36(1)(va) for the delay in depositing Employees’ contribution towards EPF/ESI. The assessee contended that all contributions were deposited before filing the return of income, citing relevant judgments to support the claim that no disallowance was warranted. Issue 3: Applicability of judgments and amendments The assessee argued that the judgments referred to, along with the Finance Act 2021 amendment, supported the position that delayed deposits of PF/ESIC contributions before the return filing date were allowable expenditures. The Tribunal analyzed the applicability of these judgments and amendments in determining the disallowances. Issue 4: Violation of principles of natural justice The assessee raised concerns regarding the addition made without granting an opportunity prior to framing the order, alleging a violation of the principles of natural justice. This issue highlighted the importance of providing a fair opportunity to the appellant during assessment proceedings. Issue 5: Interpretation of due date for deposit of contributions The Tribunal examined the due date for depositing PF/ESIC contributions and the implications of delayed deposits, emphasizing that deposits made before the return filing date were permissible expenditures, as supported by various Tribunal decisions and the High Court ruling. Issue 6: Effect of Finance Act 2021 amendment The Tribunal clarified that the Finance Act 2021 amendment did not apply to the assessment year under consideration, reinforcing the position that delayed deposits of PF/ESIC contributions before the return filing date were allowable expenditures based on established legal precedents. This detailed analysis of the judgment provides insights into the legal arguments, interpretations of relevant provisions, and the ultimate decision in favor of the assessee, highlighting the significance of legal principles and precedents in tax matters.
|
