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TMI Blog2021 (12) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... d his return of income on 18. 10. 2018 declaring total income of Rs. 39,37, 750/- which was processed u/s 143 (1) of the Act and in terms of intimation u/s 143 (1) dated 17. 05. 2019 issued by CPC, it made disallowance of Rs. 11, 99, 710/- towards employees' contribution towards ESI and PF. 4. On appeal, the Ld. CIT(A), NFAC has confirmed the disallowance made u/s 143 (1) of the Act on account of assessee' s failure to pay the employees' contribution of ESI & PF within the prescribed due date under the relevant Statute as per section 36(1) (va) of the Act. Against the said order, the assessee has now come in appeal before us. 5. During the course of hearing, the Ld. AR submitted that the assessee has deposited employees' contribution towards ESI and PF though with the delay of few days from the due date mentioned in the respective Statutes, however, the same was deposited well before the due date of filing of return of income u/s 139 (1) of the Act. It was submitted that the said fact is not under dispute and where such contribution has been deposited before the due date of filing of the return of income, no disallowance u/s 36 (1) (va) of the Act can be made. In support, relianc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble High Court after extensively examining the matter and considering the various decisions of the Hon'ble Supreme Court and various other High Courts has decided the matter in favour of the assessee. In the said decision, the Hon'ble High Court was pleased to held as under: "20. On perusal of Sec.36(l)(va) and Sec.43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Sect/on 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduct/on i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in the case of Allied Motors (P) Ltd. (su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ." 16. The said decision has subsequently been followed in CIT vs. Jaipur Vidyut Vitran Nigam Ltd, (supra), CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd. (supra), and CIT vs Rajasthan State Beverages Corporation Limited (supra). In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(l)(va) of the Act. 17. We further note that though the Id.CIT(A) has not disputed the various decisions of Hon'ble Rajasthan High Court but has decided to follow the decisions rendered by the Hon'ble Delhi, Madras, Gujarat and Kerala High Courts. Given the divergent views taken by the various High Courts and In the instant case, the fact that the jurisdiction over the Assessing officer lies with the Hon'ble Rajasthan High Court, in our considered view, the Id CIT(A) ought to have considered and followed the decision of the jurisdictional Rajasthan High Court, as evident from series of decisions referred supra, as the same is binding on all the appellate authorities as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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(l)(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 identical issue the tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1,4.2021. We are therefore of the view that the impugned additions made under section 36(l)(va) of the Act in both the Assessment Years deserves to be deleted. " 7. In light of the aforesaid discussions and in the entirety of facts and circumstances of the case and following the consistent decisions taken by the various Benches of the Tribunal, the addition by way of adjustment while processing the return of income u/s 143(1) amounting to Rs. 6,28,972/- so made by the CPC towards the deposit of the employees's contribution towards ESI and PF though paid before the due d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further note that though the Id. CIT(A) has not disputed the various decisions of Hon'ble High Courts including the decision of the jurisdictional Himachal Pradesh High Court but has referred to the amendment brought in by the Finance Act, 2021. It is a consistent position across various Benches of the Tribunal including Chandigarh Benches that the amendment which has been brought in by the Finance Act, 2021 shall apply w. e. f. assessment year 2021 - 22 and subsequent assessment years and the impugned assessment year being assessment year 2018- 19, the said amendment cannot be applied in the instant case. Therefore, considering the entirety of facts and circumstances of the case and following the decisions of various High Courts as well as Coordinate Benches of the Tribunal referred above, the addition made by way of adjustment while processing the return of income u/s 143 (1) of the Act, amounting to Rs. 11,99,710/- so made by the CPC towards the deposit of employees' contribution towards ESI and PF paid before the due date of filing of the return of income u/s 139 (1) of the Act, is hereby directed to be deleted. 9. The appeal of the assessee is accordingly allowed. ITA No. 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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