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2021 (12) TMI 1246 - AT - Income TaxDelayed employee's contribution to the employee welfare funds u/s. 2(24)(x) r/w s. 36(va) - rectification of mistake - amount being deposited before the due date of filing the return of income u/s. 139 (1) - Scope of amendment - HELD THAT - In view of the foregoing, no question of the said Explanations being read as retrospective, so as to apply for the relevant year, sustaining the impugned additions, which therefore fail. This is, however, subject to any decision/s by the Hon'ble jurisdictional High Court, which would, where so, hold, even justifying a rectification u/s. 154/254(2), even where rendered after the date of the order sought to be rectified. See SAURASHTRA KUTCH STOCK EXCHANGE LTD 2008 (9) TMI 11 - SUPREME COURT and SMT. ARUNA LUTHRA. 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT No such decision has been found, or otherwise pointed out by the parties, as was the case before the Tribunal in Nikhil Mohine 2021 (11) TMI 927 - ITAT JABALPUR Any such decision, even if discovered later, may operate to amend this order, or the order giving appeal effect thereto, to bring it in conformity or agreement with the said decision/s, of course, after allowing a fair opportunity of hearing to the assessee. the impugned additions, therefore, could not have been made under the given facts and circumstances of the case, and are directed for deletion. Decided in favour of assessee.
Issues:
Appeal against the Order by the Commissioner of Income Tax (Appeals) dismissing the assessee's appeal contesting the processing of its return of income under section 143(1) for the Assessment Year 2018-19. Detailed Analysis: Issue 1: Employee's Contribution to Welfare Funds The appellant contested the processing of its return under section 143(1) concerning additions related to the employee's contribution to welfare funds. The appellant relied on a Tribunal order in Nikhil Mohine case, emphasizing that adjustments under section 143(1) should only be made for non-contentious matters. The Tribunal in Nikhil Mohine case held that the employee's contribution to welfare funds should not be added to the returned income. The Tribunal also discussed the retrospective nature of the newly inserted Explanations to sections 36(1)(va) and 43B by Finance Act, 2021. The Tribunal concluded that the Explanations have a prospective effect and do not apply to the relevant Assessment Year 2018-19. Issue 2: Tribunal's Decision in Nikhil Mohine The Tribunal in Nikhil Mohine case examined the addition of employee's contributions to Provident Fund and State Insurance Fund to the returned income under section 143(1)(a). It referred to various court decisions and held that adjustments under section 143(1) cannot be decided on merits due to conflicting judicial opinions. The Tribunal emphasized that the Explanations to sections 36(1)(va) and 43B by Finance Act, 2021 seek to clarify the issue of employee's contributions to welfare funds and are retrospective. However, the Tribunal noted that the proposed amendments were intended to be prospective. Issue 3: Decision of the Tribunal The impugned order did not address the retrospective nature of the Explanations and focused solely on the merits of the additions. The Tribunal ruled that the Explanations should not be considered retrospective and do not apply to the relevant Assessment Year. The impugned additions were directed to be deleted as they could not have been made under the circumstances. The appeal by the assessee was allowed based on these findings. In conclusion, the Tribunal's decision in the present case emphasized the non-retrospective nature of the Explanations to sections 36(1)(va) and 43B by Finance Act, 2021, and ruled in favor of the assessee regarding the employee's contribution to welfare funds for the Assessment Year 2018-19.
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