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TMI Blog2022 (1) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of belated remittance of Employee's provident fund and ESI Contribution of Rs. 9,45,931/-. After the omission of the second proviso to section 43B w.e.f. 01-04-2004, the deduction is allowable under the first proviso, if the payment is made on or before the due date for furnishing the return of income 2. On the facts and circumstances of the case the learned CIT (Appeal) erred in disallowing the claim in respect of belated remittance of Employee's provident fund based on the insertion to explanation to section 36 of Income Tax Act, 1961 by the Finance Act, 2021. The assessee believes that explanation to section 36 by Finance Act, 2021 has prospective effect and not retrospective effect. Hence the addition of Rs. 9,45, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The CIT(A) noticed the difference between the employees' contribution and the employer's contribution and held insofar as the employees' contribution to ESI and PF, the same need to be remitted within the due date as mentioned in the respective Acts. The CIT(A) also relied on the amendment brought to section 36(1)(va) by Finance Act, 2021 and 43B of the I.T.Act. 6. Aggrieved by the order of Ld.CIT(A), the assessee filed appeal before the Tribunal. 7. The Ld.AR submitted that identical issue is decided by the coordinate Bench of this Tribunal in following cases wherein the amendment has been held to be prospective in nature. * M/s.The Continental Restaurant & Café Co. v. ITO in ITA No.388/Bang/2021 (order dated 11.10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble High Court was considering following substantial question of law:- "Whether in law, the Tribunal was justified in affirming the finding of Assessing Officer in denying the appellant's claim of deductions of the employees contribution to PF/ESI alleging that the payment was not made by the appellant in accordance with the provisions u/s 36(1)(va) of the I.T.Act?" 7.1 In deciding the above substantial question of law, the Hon'ble High Court rendered the following findings:- "20. Paragraph-38 of the PF Scheme provides for Mode of payment of contributions. As provided in sub para (1), the employer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature. The Hon'ble Supreme Court in the recent judgment in the case of M.M.Aqua Technologies Limited v. CIT reported in (2021) 436 ITR 582 (SC) had held that retrospective provision in a taxing Act which is "for the removal of doubts" cannot be presumed to be retrospective, if it alters or changes the law as it earlier stood (page 597). In this case, in view of the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT (supra) the assessee would have been entitled to deduction of employees' contribution of PF and ESI if the payment was made prior to due date of filing of the return of income u/s 139(1) of the I.T.Act. Therefore, the amendment brought about by the Finance Act, 2021 to se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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