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TMI Blog2022 (1) TMI 1149X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2019-20, wherein the assessee has taken the following revised grounds: "1. That the prejudicial observations made in the appellate order and the assessment order are either unfounded or the same are not susceptible of giving rise to any adverse conclusion. 2. That the Learned Commissioner of Income tax (Appeals) has grossly erred in confirming the addition of Rs. 368124/- on account of late deposit of Employees Contribution to ESI and EPF on the basis of conjectures, surmises and without appreciating the facts of the case and the provisions of the Act as applicable during the financial year relevant to the assessment year and on date of filing of Income Tax Return. The addition merits deletion. 3. That the action of the Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee 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, reliance was placed on decision of the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Hemla Embroidery Mills (P) Ltd., 366 ITR 117 and the decision of the Hon'ble Supreme Court in the case of CIT Vs. Alom Extrusion Ltd., 319 ITR 306. It was fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not only by the consistent orders of the various Benches of the ITAT namely; the order dated 03.08.2021 of the Delhi Benches in the case of Insta Exhibition Pvt. Ltd. Vs ACIT in ITA 6941/Del/2017; order dated 01.07.2021 of the Hyderabad Bench in the case of Crescent Roadways Pvt. Ltd. Vs DCIT in ITA No. 1952/Hyd/2018 but also consistent orders of the Chandigarh Bench. It is seen that all along the Co-ordinate Benches have held that the amendments to Sections 36(1)(va) and u/s 43B of the Income Tax Act effected by the Finance Act, 2021 is applicable prospectively and not retrospectively. While coming to the said conclusion, the Benches have relied upon and read from the Notes on Clauses at the time of introduction of the Finance Act, 2021 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in deposit even by a single day as per the due dates specified in the respective Statutes. It was further submitted that the said amendment is only declaratory/clarificatory in nature and, is, therefore, applicable with retrospective effect by necessary intendment of deeming nature expressly stated therein. The Ld. DR accordingly submitted that in view of the unambiguous wording of the now amendment provisions of sections 36(1)(va) and 43B, it is clear that the employees' contribution can be allowed as a deduction only if it had been paid within the prescribed due dates under the relevant Statutes and this position has been clarified by the aforesaid amendment. It was accordingly submitted that there is no infirmity in the order passed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing 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. 3,68,124/- 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. Hence, ground no. 1 of assessee's appeal is allowed. 7. Regarding ground No.2 wherein the Ld.CIT(A) has sustained the disallowance of Rs. 11,14,217/- on account of provision for gratuity being debited to Profit & Loss Account, it was submitted that the assessee while filing its return of income has suo-moto disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the intimation order that the disallowance of expenditure indicated in the Audit Report was not taken into account by the applicant for computing the total income while filing its return of income. It was accordingly, submitted that the Ld.CIT(A) has accordingly, confirmed the findings of the CPC that the amount mentioned in the Audit Report was not suo moto disallowed by the assessee while filing the return of income. 9. We have heard the rival contentions and perused the material available on record. It is manifest from the return of income along with the computation of income so filed by the assessee that the provision for gratuity which has been debited in the profit/loss account has been disallowed by the assessee itself and no claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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