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2022 (5) TMI 1333 - AT - Income TaxLate deposit of employee s share towards Provident Fund by resort to provisions of Section 36(1)(va) read with section 2(24) - HELD THAT - It is seen that in the facts of the present case no doubt that there was a delay in the payments of PF in respect of employees contribution as far as time line set out by the relevant statute is concerned. However it is not disputed that the payments of PF amounting to Rs. 4, 62, 844/- was paid well before the furnishing of the return. Accordingly considering the position of law as has been consistently considered by the ITAT we allow the ground. The amendments carried out in section 36(1)(va) and 43B by the Finance Act 2021 consistently have been held to be prospective in nature and and will kick in from 2020-21 Assessment Year - Appeal of assessee allowed.
Issues Involved:
1. Legality of the disallowance of Rs. 4,62,844/- due to late deposit of employee's share towards Provident Fund under Section 36(1)(va) read with Section 2(24) of the Income Tax Act, 1961. 2. Condonation of delay in filing the appeal. Detailed Analysis: 1. Legality of the Disallowance: The primary issue revolves around the disallowance of Rs. 4,62,844/- made by the Central Processing Centre, Bengaluru, due to the late deposit of the employee's share towards the Provident Fund. The assessee contended that the payment was made before the filing of the return, which should be permissible under the law. Key Arguments and Findings: - The assessee's representative (AR) argued that the payments were made before the filing of the return, referencing the Tax Audit Report. - The Revenue's representative (DR) relied on the impugned order but did not dispute the factual position. - The Tribunal noted that while there was a delay in the payment as per the timeline set by the relevant statute, the payments were made before the filing of the return. - The Tribunal referred to consistent ITAT rulings, including ITA No. 373/CHD/2021 in Vardhman Textiles Ltd. Vs. DCIT, which held that amendments in Section 36(1)(va) and 43B by the Finance Act, 2021, are prospective and applicable from the 2020-21 Assessment Year. The current case pertains to the 2018-19 Assessment Year. - The Tribunal also cited various other ITAT decisions and the jurisdictional High Court's ruling in CIT vs. Hemla Embroidery Mills (P) Ltd., which supported the prospective application of the amendments. Conclusion: The Tribunal concluded that the disallowance made was not sustainable as the amendments carried out by the Finance Act, 2021, are prospective and not applicable to the assessment year in question. Hence, the ground of the assessee was allowed, and the addition was directed to be deleted. 2. Condonation of Delay: The appeal was filed with a delay of 29 days, which needed to be condoned. Key Arguments and Findings: - The assessee's representative relied on the Hon'ble Supreme Court's order dated 10.01.2022 in Miscellaneous Application No. 21 of 2022, which excluded the period from 15.03.2020 to 28.02.2022 for the purposes of limitation in all judicial or quasi-judicial proceedings. - The Revenue's representative did not oppose the application for condonation of delay. - The Tribunal, considering the record and the position of law, condoned the delay of 29 days and directed the parties to argue the appeal on merits. Conclusion: The delay in filing the appeal was condoned, allowing the Tribunal to proceed with the merits of the case. Final Judgment: The Tribunal allowed the appeal of the assessee, directing the deletion of the disallowance of Rs. 4,62,844/-. The order was pronounced in the presence of the parties via Webex and was recorded in the open court on 29th April 2022.
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