2022 (5) TMI 825 - AT - Income Tax

Disallowance u/s. 36(1)(va) in respect of Contribution made to PF ESI - contribution before due date of filing the return u/s. 139(1) - HELD THAT - Similar view has been taken by the Tribunal recently in a batch of appeals in the cases of Raj Kumar vs. ITO(CPC), Bengaluru 2022 (2) TMI 1224 - ITAT DELHI after considering various case laws on the issue. Respectfully following the said above decisions thus hold that the Employees Contribution towards PF ESI made before due date of filing the return u/s. 139(1) have to be allowed as deduction. Accordingly, we direct the Assessing Officer. - Decided in favour of assessee.

Summary

Issues:
Appeal against disallowance u/s. 36(1)(va) for Contribution to PF & ESI.

Analysis:
1. The Assessee filed an appeal against the disallowance made by the Ld. Commissioner of Income Tax (Appeals) concerning the Contribution to PF & ESI under section 36(1)(va).
2. Despite issuing a notice, the Assessee did not appear, and no adjournment was sought. The appeal was disposed of by hearing the Ld. DR.
3. The disallowance of Employees Contribution towards PF & ESI was upheld by the Ld. CIT(A) based on the retrospective nature of the amendments introduced by the Finance Act, 2021 to Section 36(1)(va) and 43B of the Act.
4. The Tribunal referred to a previous decision where it was held that delayed payment of PF and ESI contributions is deductible if paid before the due date of income tax return filing under section 139(1) of the Act, despite the amended provisions.
5. The Tribunal further cited a recent batch of appeals where it was ruled that Employees Contribution to PF & ESI made before the due date of filing the return under section 139(1) should be allowed as a deduction.
6. Following the decisions cited, the Tribunal allowed the Assessee's appeal, directing the Assessing Officer to allow the deduction for the Employees Contribution towards PF & ESI made before the due date of filing the return.

This detailed analysis covers the issues involved in the legal judgment comprehensively, highlighting the key arguments and decisions made by the Tribunal in favor of the Assessee regarding the disallowance u/s. 36(1)(va) for Contribution to PF & ESI.