9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (1) TMI 989 - AT - Income TaxDelayed payments of employees contribution to ESI and PF - Addition by invoking the provisions of section 36(1)(va) - amendment to section 43B of the Act by insertion of Explanation-5 and to section 36(1)(va) of the Act by insertion of Explanation-2, by the Finance Act 2021 is prospective - HELD THAT - In view of the aforestated decisions of the Ajay Piplani 2021 (10) TMI 1280 - ITAT And M/S JUPITER AQUA LINES PVT. LTD. 2021 (11) TMI 761 - ITAT CHANDIGARH therefore the contention of the Ld. DR before us that the amendment to section 36(1)(va) of the Act is retrospective is dismissed. Also since no facts distinguishing the present cases from those decided by the ITAT have been pointed out by the Ld. DR before us and admittedly the amounts of employees' contribution to ESI and PF stood paid before the due date of filing of return of income, the issue of disallowance on account of delayed payments of employees' contribution to ESI and PF is squarely covered by the aforesaid decisions, following which the disallowance made of ESI/PF employees' contribution u/s. 36(1)(va) is deleted. - Decided in favour of assessee.
Issues:
Addition made to the income of the assessee by disallowing delayed payments of employees' contribution to ESI and PF under section 36(1)(va) of the Income Tax Act. Analysis: The appeals were filed against separate orders of the Commissioner of Income Tax (Appeals) relating to assessment years 2018-19 & 2019-20. The only issue in the appeals was the addition made to the income of the assessee by disallowing delayed payments of employees' contribution to ESI and PF under section 36(1)(va) of the Act. The Commissioner upheld the addition based on various decisions and amendments to the Act. The amendment by the Finance Act, 2021, clarified that the due date for payment of employees' contribution to ESI and PF was not governed by section 43B but by the respective Acts' due dates. Despite the assessee's arguments citing previous court decisions in their favor, the addition was upheld. The ITAT had consistently ruled in favor of the assessee in similar cases, holding that the amendment to section 36(1)(va) by the Finance Act, 2021, was prospective. In a specific case, the ITAT held that the jurisdictional High Court had previously allowed deductions for employees' contributions if paid by the due date of filing the return of income under section 139(1) of the Act. Therefore, the ITAT concluded that the amendment could not be applied retrospectively and directed the AO to allow the claim of the assessee. In line with previous decisions, the ITAT dismissed the contention that the amendment to section 36(1)(va) was retrospective. Since the employees' contributions to ESI and PF were paid before the due date of filing the return of income, the disallowance made under section 36(1)(va) was deleted. The ITAT allowed both appeals of the assessee, emphasizing that the issue was squarely covered by previous decisions in favor of the assessee. In conclusion, the ITAT ruled in favor of the assessee, emphasizing that the disallowance of employees' contribution to ESI and PF was not justified as the payments were made before the due date of filing the return of income. The appeals were allowed, and the additions made by disallowing the delayed payments were deleted.
|
