9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 923 - AT - Income TaxDisallowance of delayed payment of PF and ESI - assessee s failure to pay the employee s contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) - Scope of amendment - HELD THAT - In the instant case, admittedly and undisputedly, the employees contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years . In the instant case, the impugned assessment year is assessment year 2019-20 and therefore, the said amended provisions cannot be applied in the instant case. See SHRI GOPALAKRISHNA ASWINI KUMAR 2021 (10) TMI 952 - ITAT BANGALORE Addition by way of adjustment while processing the return of income u/s 143(1) made by the CPC towards the deposit of the employee s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted. Appeal of assessee allowed.
Issues Involved:
1. Confirmation of addition in respect of employees' contribution towards ESI/PF. 2. Charging of interest under sections 234A, 234B, and 234C. Detailed Analysis: 1. Confirmation of Addition in Respect of Employees' Contribution Towards ESI/PF: The primary issue in this appeal was whether the assessee's delayed payment of employees' contributions towards ESI/PF, which were deposited before the due date of filing the return of income under section 139(1), could be disallowed under section 36(1)(va) of the Income Tax Act, 1961. Arguments by the Assessee: - The assessee argued that the contributions were deposited before the due date of filing the return of income under section 139(1), and thus, no disallowance under section 36(1)(va) should be made. - The assessee relied on several decisions, including those by the Jaipur Bench of the Tribunal and the Hon'ble Rajasthan High Court, which supported the view that contributions paid before the due date of filing the return are allowable. Arguments by the Revenue: - The Revenue contended that the payments were not made within the prescribed due dates as per section 36(1)(va) and thus were disallowed. - The Revenue also referenced the amendment brought by the Finance Act, 2021, which clarified that employees' contributions must be paid within the due dates specified in the respective legislation. Tribunal's Findings: - The Tribunal noted that the employees' contributions were deposited before the due date of filing the return of income under section 139(1). - The Tribunal referred to the consistent decisions of the Hon'ble Rajasthan High Court, which held that contributions paid before the due date of filing the return of income cannot be disallowed under section 43B read with section 36(1)(va). - The Tribunal also considered the amendment by the Finance Act, 2021, which stated that the changes would apply from April 1, 2021, and thus were not applicable to the assessment year in question. Conclusion: The Tribunal directed the deletion of the addition of Rs. 42,22,723/- made by the CPC towards the delayed deposit of employees' contributions to ESI and PF, as these were paid before the due date of filing the return of income under section 139(1). 2. Charging of Interest under Sections 234A, 234B, and 234C: The issue of charging interest under sections 234A, 234B, and 234C was deemed consequential and required no separate adjudication. Conclusion: The Tribunal allowed the appeal of the assessee and directed the deletion of the addition made for the delayed deposit of employees' contributions towards ESI and PF. The issue of interest under sections 234A, 234B, and 234C was noted as consequential. Order: The appeal of the assessee was allowed, and the order was pronounced in the open Court on 12/05/2022.
|
