9911796707
TMI Blog2021 (12) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome for AY 2018-19 declaring total income of Rs. 29,98,560/-. In an intimation dated 21.05.2019 issued u/s.143(1) of the Act, the Centralized Processing Centre (CPC) added a sum of Rs. 12.24.205 as income representing Employees share of contribution to Provident Fund/ Employees State Insurance (PF/ESI) to the extent not paid on or before the due date as mentioned in Sec 36(1)(va) of the Income Tax Act 1961. 3. Against the addition so made, the assessee preferred appeal before the CIT(A). It was contended by the assessee before CIT(A) that Employees share of ESI and PF contribution has been paid before the due date for filing of return u/s.139(1) of the Act and hence has been considered allowable on the basis of decision of Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed never to have been applied for the purposes of determining the "due date" under the said clause. The CIT(A) also held that Section 43B of the Income-tax Act relates to allowing certain deductions only on actual payments. Clause (b) of the said section provides that any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year, in which such sum is actually paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her hand, delay in payment of employer's contribution is visited with deferment of deduction on payment basis u/s.43B and is therefore not lost totally. This legal distinction between employees' contribution and employer's contribution under the Act was duly recognised by the Courts also. 6. The CIT(A), thereafter held that the amendment to section 36(1)(va) by insertion of explanation 2 and the amendment to section 43B by insertion to explanation 5 by the Finance Bill 2021 was only declaratory / clarificatory in nature and there therefore was applicable with retrospective effect by necessary intendment of deeming nature expressly stated therein. 7. In Assessment Year 2019-2020, the facts are identical except that the facts in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, the issue is covered by the decision of the Hon'ble Karnataka High Court. The next aspect to be considered is whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also. On this aspect, we find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in the earlier paragraph of this order on iden ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
