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TMI Blog2022 (2) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... the same had been deposited prior to the filing of the return u/s 139(1). - Decided in favour of assessee - ITA No. 331/CHD/2021 - - - Dated:- 12-1-2022 - Diva Singh, Member (J) And Vikram Singh Yadav, Member (A) For the Appellant : Parikshit Aggarwal, CA For the Respondents : Ranjeet Kaur, Sr. DR ORDER Per Diva Singh The present appeal has been filed by the assessee wherein the correctness of the order dated 22.09.2021 of CIT(A) (NFAC i.e. National Faceless Appeal Centre) Delhi pertaining to 2018-19 assessment year on the following grounds: 1. That on the facts, circumstances and legal position of the case, the Worthy CIT(A), NFAC in Appeal No. CIT(A), Chandigarh-1/10478/2019-20 has erred in passing the order in contravention of the provisions of S. 250(6) of the Income Tax Act, 1961. 2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of Ld. AO (CPC) in making addition of ₹ 8,08,313/- u/s. 36(1)(va) of the Act even when the appellant collected ESI and PF from salary of the employees and whole of the amount had been deposited well before the due date of filing of Income Tax Return. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trusions Ltd. 319 ITR 306 (S.C) have addressed the legal position, though it need be clarified that the decision rendered was in the context of amendments carried out by way of Second Proviso to Section 43B which was omitted by Finance Act, 2003. This Amendment was held to be clarificatory and hence would operate retrospectively. In the facts of the present case, Amendment by way of Explanation 2 to Section 36(va) and Explanation 5 to Section 43B by Finance Act, 2021 had been held to be having prospective effect. For the said purposes relying upon the Notes on Clauses at the time of introduction of the Finance Bill, 2021, the Co-ordinate Benches have consistently held that the said amendments have been inserted w.e.f. assessment year 2020-21 assessment year. For ready reference, relevant extract from ITA No. 194/CHD/2021 in the case of Surya Resorts Pvt. Ltd. Dharamshala is given below: 4. We have heard the rival submissions and perused the material available on record. It is an admitted fact that there was a delay in the payment of EPF relatable to the employees' contribution as far as the time limit set out by the specific Act is concerned. It is also an admitted fact th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rused the orders of the lower authorities. The facts shows that the assessee has collected the sum of ₹ 12,16,260/- being employee's contribution under the provident fund and with respect to ESI laws. The above contribution was admittedly not deposited by the assessee within the due date prescribed under the respective ESI and PF statue however, same was deposited before the due date of filing of return of income. Therefore, the ld. AO as well as the ld. CIT(A) disallowed the same holding that such contribution becomes the income of the assessee under the provision of section 2(24)(x) of the Act and thereafter if the same is deposit within the due date prescribed under the respective laws then same is allowable as deduction u/s. 36(1)(va) of the Act. Coordinate bench in case of DOT Vs Dee Development Engineers in ITA No. 4959/DEL/2016 (A.Y 2011-12) has held as Under:- 7. We have heard both the parties and perused all the relevant material available on record. As regards Ground No. 1, the assessee company has not deposited the employees' contribution within the due date which is prescribed under the said statute i.e. Provident Fund and ESIC. This issue is dealt by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said clause provides that for the purposes of this clause, due date means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. It is proposed to insert Explanation 2 to clause (va) of sub-section (1) of the said section so as to clarify that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the due date under the said clause. This amendment will take effect from 1st April, 2021. And will accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Therefore it is apparent that the above amendment do not apply to the assessment year 2014 - 15 in this appeal. 8. In view of this we allow the solitary ground of appeal raised by the assessee holding that the addition/disallowance made by the learned assessing officer of late deposit of employees contribution to the provident fund and ESI, as it is deposited before the due date of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 6941/Del/2017 of the Delhi Benches; order dated 01.07.2021 of Hyderabad Benches in M/s. Crescent Roadways Pvt. Ltd. V Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018, order dated 27.08.2021 in the case of M/s. Jupiter Aqua Lines Pvt. Ltd. Vs DCIT ITA 83/CHD/2021 and order dated 04.10.2021 in the case of Ajay Piplani Vs Assistant Director of Income Tax, CPC, Bengaluru in ITA No. 114/CHD/2021 of the ITAT Chandigarh Benches. Reference may also be made to various other orders of the Chandigarh Benches in ITA 250/CHD/2021 in the case of Shri Sukhdev Singh, Mohali and ITA 255/CHD/2021 in the case of M/s. CZAR FAUCETS Ltd. Chandigarh wherein consistently following the decisions of the jurisdictional High Court in the case of CIT Vs Nuchem Ltd. (ITA No. 323 of 2009) and CIT Vs Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167, the Tribunal has consistently allowed similar claims of the assessee holding that the Amendments effected by the Finance Act 2021 to section 36(1)(va) and u/s. 43B of the income Tax Act are not clarificatory in nature and they do not have retrospective effect and are applicable prospectively. Reading from the Notes on Clauses at the time of introduction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese decisions, Their Lordships in the case of Nipso Polyfabriks Ltd. (supra) consciously followed the view taken by the Hon'ble Delhi High Court in Aimil's case and concluded that the view expressed by the Hon'ble Kerala High Court in CIT Vs Commonwealth Trust Ltd. (2004) 269 ITR 290 was not being followed as it was considered to be no longer good law in view of the judgement of the Apex Court in Alom Extrusions Ltd. Accordingly, reliance placed by the ld. AR on the decision of the jurisdictional High Court qua the employee's contribution stands addressed in favour of the assessee. However, the said decision has not taken into consideration the change proposed by the Amendments carried out by Finance Act, 2021 which we have addressed at length in the earlier part of this order. This issue stands covered by various decisions of the ITAT which stand addressed. Accordingly, the ground of the assessee is allowed. Said order was pronounced in the presence of the parties via Webex. 5. Accordingly, relying on the legal position as set out hereinabove, we hold that the addition sustained on facts has to be deleted. Directed accordingly. 6. In the result, the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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