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2022 (4) TMI 608 - AT - Income TaxDelayed deposit of employees contribution to PF and ESI u/s 36(i)(va) - contributing/depositing the same before the due date of filing of return of income u/s 139(1) - HELD THAT - We find that the issue is covered in favour of the assessee as the assessment year involved is AY 2017-18 and the Explanation-5 inserted by Finance Act, 2021 to section 43B w.e.f. 01.04.2021 is not applicable to the assessment year under consideration. This issue is squarely covered by the decision of CIT, Kolkata vs. M/s Vijay Shree Limited 2011 (9) TMI 30 - CALCUTTA HIGH COURT which has been further followed by case of Harendra Nath Biswas 2021 (7) TMI 942 - ITAT KOLKATA . We do not accept the Ld. CIT(A) s stand denying the claim of assessee since assessee delayed the employees contribution of EPF ESI fund since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds and we allow the appeal of the assessee
Issues:
Appeal against order of National Faceless Appeal Centre under Income Tax Act - Delay in deposit of employees' contribution to PF and ESI fund - Applicability of Explanation-5 to section 43B - Judicial precedents - Addition made by Assessing Officer - Appeal grounds - Assessment year 2017-18. Analysis: The appeal was filed against the order of the National Faceless Appeal Centre under the Income Tax Act, challenging the addition of delayed deposit of employees' contribution to PF and ESI fund. The appellant contended that the amount was deposited before the due date of filing the return, citing judicial precedents in support of their case. The Coordinate Bench decision in a similar case highlighted that the issue is covered in favor of the assessee for the assessment year 2017-18, as Explanation-5 to section 43B inserted by Finance Act, 2021, is not applicable. The Tribunal noted that the law laid down by the jurisdictional High Court would apply, and since Explanation-5 was not made retrospective, the same principles should be followed. The Tribunal referred to a case where the High Court allowed the deduction of the amount paid by employees' contribution beyond the due date, emphasizing the curative nature of the amendment to Section 43(B) of the Act. The Tribunal disagreed with the CIT(A)'s decision to deny the claim of the assessee based on the Explanation-5, as the employees' contribution to EPF and ESI fund was deposited before filing the return of income. Relying on the binding decision of the High Court, the Tribunal allowed the appeal of the assessee, setting aside the impugned order of the CIT(A) and ordering the deletion of the addition made by the lower authorities. Consequently, the appeal of the assessee was allowed for the assessment year 2017-18. In conclusion, the Tribunal's decision was based on the non-applicability of Explanation-5 to section 43B for the relevant assessment year, the binding judicial precedents supporting the assessee's case, and the timely deposit of employees' contribution to PF and ESI fund before filing the return of income. The Tribunal upheld the appeal, emphasizing the importance of adhering to legal provisions and judicial interpretations in tax matters.
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