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2022 (6) TMI 579 - AT - Income TaxLate payment of PF ESI when the same was paid within time allowed u/s 139(1) of the Act - Scope of amendment - HELD THAT - We find that the issue is covered in favour of the assessee as the assessment year involved is AY 2019-20 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. The relevant portion of the Coordinate Bench decision of the Tribunal in the case of Harendra Nath Biswas vs. DCIT 2021 (7) TMI 942 - ITAT KOLKATA wherein do not accept the Ld. CIT(A) s stand denying the claim of assessee since assessee delayed the employees contribution of EPF ESI fund and as per the binding decision of the Hon ble High Court in Vijayshree Ltd 2011 (4) TMI 63 - ITAT KOLKATA . u/s 36(1)(va) of the Act 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. Credit of TDS - HELD THAT - As there is no material available on record. Therefore ends of justice this issue is remand back to the file of AO for deciding the same by way of speaking order. We also directed the assessee to remain vigilant in receiving notices of hearing from AO and should not request for any adjournment unless otherwise required for reasonable cause and should file all necessary documents so as to facilitate the AO for passing speaking order. Needless to mention that the assessee should be given proper opportunity of being heard.
Issues involved:
1. Condoning the delay in filing the appeal. 2. Disallowance of contribution towards ESI and PF. 3. Applicability of Explanation-5 to section 43B. 4. Credit of TDS. Analysis: Issue 1: Condoning the delay in filing the appeal The appellant filed an appeal against the order of the National Faceless Appeal Centre under section 250 of the Income Tax Act. The appeal was found to be time-barred by 173 days. The appellant cited ill health of the representative and the prevailing pandemic situation as reasons for the delay. The Tribunal, after considering the circumstances, decided to condone the delay and admitted the appeal for adjudication. Issue 2: Disallowance of contribution towards ESI and PF The core issue in this appeal was the disallowance of Rs. 1,27,428 for late payment of PF & ESI contributions. Although there was a delay in depositing the contributions, they were made before the due date of filing the return. The Tribunal referred to relevant case laws, including the decision of the Jurisdictional Calcutta High Court and a previous Tribunal decision, which supported the assessee's position. The Tribunal found that the issue was in favor of the assessee, especially considering the assessment year and the absence of applicability of Explanation-5 to section 43B. Issue 3: Applicability of Explanation-5 to section 43B The Tribunal discussed the applicability of Explanation-5 to section 43B, inserted by the Finance Act, 2021, to deny the claim of the assessee. However, the Tribunal found that the Explanation-5 was not applicable to the assessment year in question (AY 2019-20). The Tribunal relied on the decision of the Jurisdictional High Court and dismissed the CIT(A)'s stand, allowing the appeal of the assessee. Issue 4: Credit of TDS Regarding the credit of TDS amounting to Rs. 18,591, the Tribunal noted the absence of material on record. The issue was remanded back to the Assessing Officer for a decision by way of a speaking order. The Tribunal directed the assessee to cooperate with the AO in providing necessary documents and attending hearings, ensuring a fair opportunity to be heard. In conclusion, the Tribunal partly allowed the appeal of the assessee, setting aside the CIT(A)'s order on the disallowance issue and remanding the TDS credit issue back to the AO for a decision.
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