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2022 (3) TMI 840 - AT - Income TaxRectification of mistake u/s 154 - Delayed Employees contribution to the Employee Provident Fund and Employee State Insurance Fund - addition u/s 2(24)(x) r/w s. 36(1)(va) - 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:
Appeals against Orders by CIT(A) for assessment years 2018-19 & 2019-20 regarding addition of employee's contribution to welfare funds deposited beyond due dates specified in section 36(1)(va). Analysis: 1. The appeals were filed against Orders by CIT(A) dismissing/partly allowing the assessee's appeals contesting the processing of its returns of income for assessment years 2018-19 & 2019-20. The only issue raised was the addition of employee's contribution to welfare funds deposited beyond due dates specified in section 36(1)(va) but before the due date of filing the return of income under section 139(1) of the Income Tax Act, 1961. The appellant argued that the addition was debatable and could not have been made under section 143(1) based on precedents such as CIT v. Shikarchand Jain and CIT v. GEI Engineering Ltd. The Tribunal in Nikhil Mohine also supported the appellant's position, emphasizing the need for a decision by the jurisdictional High Court to justify such an addition. The Senior DR could not counter these contentions, and no contrary decision by the jurisdictional High Court was presented. 2. The Tribunal referred to its decision in Nikhil Mohine, where the Revenue added the employees' contribution to the Employee Provident Fund to the assessee's income under section 143(1) for the relevant years. The Tribunal noted conflicting judicial opinions on the matter and the limited scope of adjustments under section 143(1). It emphasized that the issue could not be decided on merits without a decision by the jurisdictional High Court. The Tribunal discussed the retrospective effect of the Explanations inserted by the Finance Act, 2021, clarifying the treatment of employee's contributions to welfare funds under section 43B(b) and section 36(1)(va). The Tribunal concluded that the Explanations were clarificatory and retrospective, despite being proposed as prospective amendments. 3. The Tribunal held that the view expressed in the impugned orders on the additions was of little consequence due to the limited scope of adjustments under section 143(1). It highlighted the absence of a decision by the jurisdictional High Court justifying the additions and reiterated the prospective nature of the Explanations under the Finance Act, 2021. The Tribunal emphasized that there was no basis for giving retrospective effect to the Explanations, and the additions made by the Revenue failed to sustain scrutiny. The Tribunal directed the deletion of the impugned additions, stating that any subsequent decision by the jurisdictional High Court could amend the order after providing a fair opportunity of hearing to the assessee. 4. In conclusion, the Tribunal allowed the assessee's appeals, pronouncing the order on March 10th, 2022.
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