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2022 (9) TMI 344 - AT - Income TaxDelayed payment of employees contribution to ESI and EPF u/s.36(1)(va) - Deposits prior to the due date of filing of its return of income - HELD THAT - Admittedly, it is though a matter of fact borne from record that the assessee had delayed deposit of an amount of Rs.10,02,073/- towards employee s share of contributions towards PF ESIC i.e. beyond the stipulated time period contemplated under the respective Employees Welfare Act, but had deposited the same prior to the due date of filing of its return of income for the year under consideration. Backed by the aforesaid facts, it is the claim of the assessee that now when the amount in question had been deposited prior to the due date of filing of its return of income, therefore, no disallowance of the same was called for u/s.43B As the facts and the issue involved in the aforesaid order of the Tribunal in the case of Ind Synergy Ltd. 2022 (4) TMI 36 - ITAT RAIPUR remains the same as are there before us in the case of the present assessee, therefore, we respectfully follow the same. We, thus, in terms of our aforesaid observations set-aside the order of the CIT(Appeals) and direct the AO to vacate the disallowance.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Disallowance of Rs.10,02,073/- under Section 36(1)(va) for delayed payment of employees' contributions to ESI and EPF. 3. Applicability of amendments to Section 36(1)(va) and Section 43B introduced by the Finance Act, 2021. Issue-wise Detailed Analysis: 1. Condonation of Delay: The appeal was filed 128 days late. The delay was attributed to circumstances beyond the control of the assessee, and not due to deliberate conduct or negligence. The Departmental Representative did not object to the condonation of delay. The Tribunal, drawing support from the Hon'ble Supreme Court's order in Suo Moto Writ Petition (Civil) No.3 of 2020 and subsequent modifications, condoned the delay. 2. Disallowance under Section 36(1)(va): The Centralized Processing Center (CPC), Bengaluru, while processing the return of income for the assessment year 2018-19, disallowed Rs.10,02,073/- under Section 36(1)(va) read with Section 43B due to delayed deposit of employees' contributions to PF and ESI. The assessee contended that the contributions were deposited before the "due date" for filing the return of income, thus no disallowance should be made under Section 43B. The Tribunal referred to its previous order in the case of M/s Ind Synergy Limited Vs. The DCIT-1(2), Raipur, ITA No.312/RPR/2016, where it was held that both employers' and employees' contributions to PF and ESI are covered under Section 43B, and if deposited before the "due date" of filing the return, no disallowance should be made. 3. Applicability of Amendments by Finance Act, 2021: The Tribunal examined whether the amendments introduced by the Finance Act, 2021, to Section 36(1)(va) and Section 43B, which clarified that delayed deposits of employees' contributions are not saved by the extended time period under Section 43B, are applicable retrospectively. The Tribunal cited the judgment of the ITAT, Amritsar in the case of Vinko Auto Industries Ltd. Vs. DCIT, which concluded that these amendments are applicable prospectively from 01.04.2021, i.e., from A.Y 2021-22 onwards. Therefore, these amendments do not apply to the assessment year 2018-19. Conclusion: In light of the above deliberations and judicial precedents, the Tribunal set aside the order of the CIT(Appeals) and directed the AO to vacate the disallowance of Rs.10,02,073/- made under Section 36(1)(va). The appeal was allowed, and the general ground of appeal was dismissed as not pressed. Order Pronounced: The order was pronounced in open court on 29th August 2022.
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