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TMI Blog2021 (12) TMI 1128X X X X Extracts X X X X X X X X Extracts X X X X ..... ome prescribed u/s 139(1) - also there is no doubt qua applicability of the amended provisions referred above, prospectively ad second aspect as considered/determined by the ld. CIT(A) qua retrospective application of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanations have been inserted by Finance Act, 2021 qua employees share in respect of PF ESI Act, is also unsustainable - Decided in favour of assessee. - I.T.A Nos. 145 And 146/ASR/2021, I.T.A Nos. 143 & 144/ASR/2021, I.T.A No. 142/ASR/2021 - - - Dated:- 30-11-2021 - Shri Mahavir Prasad, Judicial Member And Shri Manish Borad, Accountant Member For the Assessee : Sh. Sandeep Vijh, C. A. For the Revenue : Sh. S. M. Surendranath, D. R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er u/s 36(1)(va) of the Act for the delay in deposit of Employees Contribution towards PF/ESI before the due date prescribed under the corresponding statute. 6. We find that this tribunal in the case of Nipun Jain (supra) has deleted the said disallowance on observing that the alleged amount of employee s contribution PF and ESI has been deposited befor the due date of filing return of income prescribed u/s 139(1) of the Act. Relevant extract of this decision is reproduced below: The CIT(A) while upholding the disallowance/addition qua employees contributions towards PF ESI mainly focused on two aspects/determinations- (i) non-applicability of the provisions of Section 43B of the Act to the employee s share qua PF ESI and (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of the Assessee s contention and of the Revenue. The controversy with regard to divergent views of different High Courts, has been settled by the Hon'ble Apex Court in the case of CIT Vs. M/s. Vegetables Products Ltd. (88 ITR 192) by laying the dictum that if two reasonable constructions of a taxing provision are possible that construction which favours the Assessee must be adopted . The Hon ble jurisdictional High Court in the case of CIT Vs. M/s Hemla Embroidery Mills (P) Ltd. (366 ITR 167) (P H HC) and in the case of CIT Vs. M/s Mark Auto Industries Ltd. (358 ITR 43) (P H HC) clearly held that the assessee is entitled to claim deduction of employee s share of ESI PF u/s.43B of the Act, if the same has been deposited pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act w.e.f. 1st April, 2021, and Assessment Year 2021-21 onwards, hence there is no doubt qua applicability of the amended provisions referred above, prospectively. On the aforesaid discussion, the second aspect as considered/determined by the ld. CIT(A) qua retrospective application of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanations have been inserted by Finance Act, 2021 qua employees share in respect of PF ESI Act, is also unsustainable . 5.4 In view of the above discussions, the disallowances of ₹ 5,88,203/- for A.Y.2018-2019 and ₹ 60,540/- for A.Y.2019-2020 made by the A.O. and confirmed by the CIT(A) are not sustainable and, hence, the same stands deleted. 6. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overed under section 43B of the Act and therefore if the share of the employee's share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... andum to the Finance Act, 2021 proposing amendment in both Section 36(va) as well as Section 43B by inserting corresponding Explanations that although the impugned employees provident fund comes under the former provison only, the same is applicable from 01.04.2021 onwards. Meaning thereby that the legislature itself has condoned the impugned default before 01.04.2021. We thus delete the impugned employees provident fund disallowance of ₹ 8,11,648/- for this precise reason alone. Necessary computation to follow as per law. 9. We therefore respectfully following the proposition laid down the above referred decision of various tribunals on this common issue raised before us, we are of considered view that the impugned disallowances ..... X X X X Extracts X X X X X X X X Extracts X X X X
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