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2022 (2) TMI 225 - AT - Income TaxDelayed payment of employee contribution to ESI (6 days delay) u/s.43B - HELD THAT - This issue is covered by the order of this Tribunal in the case of M/s. Jana Urban Services For Transformation Pvt. Ltd. 2021 (10) TMI 842 - ITAT BANGALORE wherein as find no merit in the argument of the ld. DR since the explanation as provided in Finance Act 2021 prescribes that the amendment in both sec. 36(va) as well as 43B by inserting corresponding explanation that although impugned PF comes in the form of provision and the same is applicable from 1/4/2021 onwards only. In the present case we are concerned with the asst. year 2017-18 and the amended provision could not be applied retrospectively as it is only applicable w.e.f 1/4/2021. Being so no disallowance could be made by the AO in respect of PF/ESI paid within the due date of filing return of income. Though it was beyond the date mentioned in the respective Act. This view of ours is supported by various judgment relied on by the ld. AR. Accordingly the appeal of the assessee is allowed.
Issues:
Disallowance of delayed payment of employee contribution to ESI under section 43B of the Income-tax Act. Analysis: The appeal concerns the disallowance of delayed payment of employee contribution to ESI, amounting to ?3,31,042 with a 6-day delay, under section 43B of the Income-tax Act for the assessment year 2019-20. The appellant argued that the payment was made before the due date of filing the return of income, making it allowable under section 43B. The Tribunal referred to a similar case where it was held that if the contribution is made before the due date for filing the return of income, the employer is entitled to deduction, irrespective of the due dates under the PF Act or PF Scheme. The Tribunal disagreed with the Revenue's argument that the Employees' Contribution was not intended to be covered by section 43B, citing amendments in the Finance Act 2021. The Tribunal allowed the appeal based on the precedent set in previous judgments and the specific provisions of the Income-tax Act. The Tribunal relied on various judgments to support its decision, including the Hon'ble Karnataka High Court's judgment in CIT v. Sabari Enterprises, which clarified that the deduction for payment of tax can be claimed if the statutory liability of payment of provident fund or other contribution funds is paid on or before the due date applicable for filing returns of income under section 139 of the Act. The Tribunal also considered the deletion of the second proviso to section 43B by the Finance Act 2003 and cited relevant case laws to support the assessee's case. Additionally, the Tribunal referred to judgments from different High Courts and Tribunals to reinforce the interpretation of the statutory provisions related to the deduction of contributions under the Income-tax Act. In conclusion, the Tribunal allowed the appeal by the assessee, following the precedent set in previous orders and considering the specific provisions of the Income-tax Act. The Tribunal's decision was based on the interpretation of the statutory provisions and relevant case laws, emphasizing that the deduction for payment of tax can be claimed if the contribution is made before the due date for filing the return of income, as specified under section 139 of the Act. The Tribunal's ruling was in favor of the appellant-assessee, and no costs were awarded in this matter.
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