2021 (10) TMI 753 - AT - Income Tax

Delayed payment of employees contribution towards PF ESI - whether assessee in depositing employees contribution to PF and ESI within the due date? - Scope of amendment - HELD THAT - It is an admitted fact which has not been disputed by either by the AO or the Ld. CIT(A) that the assessee has remitted the employees contribution towards PF ESI before filing of return u/s. 139(1) of the Act. Having taken note of this fact and also the fact that this Tribunal has already taken a view that the amendment brought in by Finance Act, 2021 on this issue has been held to be prospective in nature in the case of Shri Harendra Nath Biswas 2021 (7) TMI 942 - ITAT KOLKATA , therefore, we reiterate the same view that the amendment/explanation brought in by Finance Act, 2021 with effect from 01.04.2021 on this issue is prospective; and taking note that the relevant assessment years are 2019-20 and 2017-18, the ibid explanation brought in by Finance Act, 2021, cannot be used/applied to unsettle the settled position of law since there is no retrospective legislative over-ruling. In the light of the aforesaid decision of the coordinate Bench of this Tribunal, we respectfully follow the same which is in consonance with the decision of the Hon ble Calcutta High Court in Vijayshree Ltd. 2011 (9) TMI 30 - CALCUTTA HIGH COURT and allow the appeals of the assessee and direct the AO to delete the addition made in this regard in all the above three appeals.

Summary

Issues:
Confirmation of addition made by AO on account of delay in payment of employees' contribution towards PF & ESI before filing of return u/s. 139(1) of the Income-tax Act, 1961.

Analysis:

1. Issue of Delayed Payment of Employees' Contribution:
The appeals were filed against separate orders of Ld. CIT(A) regarding the addition made by the AO on account of delayed payment of employees' contribution towards PF & ESI. The Ld. AR argued that the Finance Act, 2021 amendment is not applicable in this case, citing a previous Tribunal decision. The Ld. CIT(A) confirmed the additions, but the AR contended that the issues in all appeals are res-integra, relying on a High Court decision and the Tribunal's order. The Ld. DR supported the CIT(A)'s action.

2. Tribunal's Decision:
After hearing both parties and examining the records, the Tribunal noted that the central issue in all appeals was the confirmation of additions made by the CIT(A) on account of delayed payment of employees' contribution towards PF & ESI. It was undisputed that the assessee had remitted the contributions before filing the return u/s. 139(1) of the Act. The Tribunal reiterated that the Finance Act, 2021 amendment was prospective in nature based on a previous decision. As the relevant assessment years were 2019-20 and 2017-18, the Tribunal held that the amendment brought in by the Finance Act, 2021 could not unsettle the settled legal position upheld by the jurisdictional High Court. Therefore, the Tribunal allowed the appeals of the assessee and directed the AO to delete the additions in all three appeals.

3. Conclusion:
In conclusion, the Tribunal allowed all the appeals of the assessee, emphasizing that the Finance Act, 2021 amendment did not apply retrospectively to unsettle established legal positions. The decision was based on previous Tribunal rulings and in line with the judgment of the Hon'ble Calcutta High Court. As a result, the additions made by the AO on account of delayed payment of employees' contribution towards PF & ESI were directed to be deleted.

This detailed analysis covers the key issues and the Tribunal's decision regarding the delayed payment of employees' contribution towards PF & ESI in the mentioned legal judgment.