9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (4) TMI 441 - AT - Income TaxDelayed payment of employee's contribution to PF/ESIC - HELD THAT - This is not disallowable as the amendments to Section 36(1)(va) and Section 43B effected by Finance Act, 2021 were 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 2018-19 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 Caf Company vs. ITO 2021 (10) TMI 843 - ITAT BANGALORE and Adyar Ananda Bhavan Sweets India P. Ltd. 2021 (12) TMI 558 - ITAT CHENNAI Consequently, we see no error in the order of the CIT(A) and therefore decline to interfere. Appeal of the Revenue is dismissed.
Issues involved:
Challenge of reversal of disallowance under Section 36(1)(va) r.w. Section 2(24)(x) concerning delayed deposit of employee's contribution towards PF and ESIC. Detailed Analysis: Issue 1: Reversal of Disallowance The Revenue challenged the reversal of disallowance made by the Assessing Officer under Section 36(1)(va) r.w. Section 2(24)(x) concerning delayed deposit of employee's contribution towards PF and ESIC. The CIT(A) reversed the action of the Assessing Officer in its appellate order. The key contention was whether the employee's contribution to PF and ESI, deposited after the due dates prescribed in the respective Acts but before the due date of filing the Income Tax Return, should be allowed as a deduction under section 43B. Issue 2: Interpretation of Relevant Provisions The Assessing Officer relied on Section 36(1)(va) to disallow the amounts of employee's contributions where the deposit was made after the due dates under the respective Acts. The appellant contended that after the deletion of the second proviso to section 43B, such payments should be allowed if made before the due date of filing the Income Tax Return. The interpretation of section 36(1)(va) and section 43B was crucial in determining the allowability of the deductions for delayed deposits of employee's contributions. Issue 3: Judicial Precedents The appellant cited judicial pronouncements, including the Hon'ble Gujarat High Court and the Hon'ble Delhi High Court judgments, to support their claim that delayed payments of employee's contributions should be allowed as deductions under section 43B. The decisions highlighted the legislative intent behind the provisions and emphasized the importance of actual payment for expenditure allowance. Issue 4: Applicability of Amendments The appellant argued that the amendments to Section 36(1)(va) and Section 43B by the Finance Act, 2021, were applicable prospectively and should not affect the deduction claim for the Assessment Year in question. The Tribunal supported this argument, citing relevant case laws to uphold the CIT(A)'s order and dismiss the Revenue's appeal. In conclusion, the Tribunal upheld the CIT(A)'s order, emphasizing the legislative intent, judicial precedents, and the prospective applicability of amendments in allowing deductions for delayed deposits of employee's contributions towards PF and ESIC.
|
