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TMI Blog2022 (2) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 proposing amendment in section 36(1)(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(1)(va) of the Act, deserves to be deleted. - ITA No.723/Bang/2021 - - - Dated:- 8-2-2022 - Shri N.V. Vasudevan, Vice President And Shri B. R. Baskaran, Accountant Member For the Assessee : Shri. Suresh Muthukrishnan, Advocate For the Revenue : Shri. Sankar Ganesh K, JCIT(DR)(ITAT), Bengaluru. ORDER PER N. V. VASUDEVAN, VICE PRESIDENT : This is an appeal filed by the assessee against order dated18.11.2021 of CIT(A), National Faceless Appeal Centre (NFAC), Delhi, relating to Assessment Year 2019-20. 2. The assessee is a Private Limited company, engaged in the business to carry on all or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as prayed accordingly. Similar submissions was made with regard to disallowance of ₹ 1,30,500/- which had already been disallowed by the AO in the computation of total income. 6. As regards the disallowance made u/s. 36(1)(a) of the Act of ₹ 18,90,162/-, it is submitted that the AO has made the same on account of the delay in deposit of the Employees contributions of Provident Fund beyond the due date specified under the Provident Fund Act. It was submitted that the AO has disallowed a sum ₹ 18,90,1627- being the Provident Fund contributions remitted after the due date, by coming to the conclusion that the same need to be disallowed in terms of Section 36(1)(va) of the Act. The details of the contributions collected from the Employees and the actual date of remittance to the government was given as per the following details: Nature of Fund Due date for payment Date of actual payment Delay in days Amount in Rs. Provident Fund 15-05-2018 11-06-2018 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Employees State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees. 36(1) The deductions provided for in the following clauses shall be allowed in respect of matters dealt therein, in computing the income referred to in section 28- (va) any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation.-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. This clause is inserted by the Finance act with effect from April 1, 1988. The Explanation to this clause is read very carefully. Due Date has been explained stating that : means the date by which the assessee is requied as an employer to credit contribution to the empl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the same view was also reaffirmed once again by the Hon'ble High Court of Karnataka in the case of Spectrum Consultants India(P) Ltd reported in 12014] 49 taxmann.com 29(Kar). 9. The CIT(A), however, did not agree with the contentions put forth by the assessee and he proceeded to decide the issue as if the additions were in respect of contribution to ESI and PF paid beyond the due date under the relevant law relating to payment of ESI and PF, but paid before the due date for filing the return of income under section 139(1) of the Act. 10. The CIT(A), thereafter held that the amendment to section 36(1)(va) by insertion of explanation 2 and the amendment to section 43B by insertion to explanation 5 by the Finance Bill 2021 was only declaratory / clarificatory in nature and there therefore was applicable with retrospective effect by necessary intendment of deeming nature expressly stated therein. The CIT(A) upheld the addition made by the AO. 11. Aggrieved by the order of the CIT(A), assessee is in appeal before us. We have heard the rival submissions. As far as the ground No.3 raised by the assessee is concerned, the same reads as follows: 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s Mahadev Cold Storage vs Jurisdictional AO - ITA.No.41 42/Agra/2021 M/s Essae Teraoka (P.) Ltd vs DCIT - [2014] 43 taxmann.com 33 (Karnataka) Anand Kumar Jain vs ITO - ITA NO 4192/MUM/2012 ValueMomentum Software Services Private Limited vs. DCIT I.T.A. No. 2197/HYD/2017 [Assessment Year: 2013-14] dated19.05.2021 Mohan Ram Chaudhary vs. ITO ITA No. 51 54-55/Jodh/2021 [Assessment Year: 2018-19} dated 28.09.2021 16. The Hon ble Karnataka High Court in the case of Essae Teraoka Pvt. Ltd., (supra) has taken the view that employee s contribution under section 36(1)(va) of the Act would also be covered 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. In this case there is no dispute that the assessee made payment of the Employees share of PF/ESI on or before the due date for filing return of income for AY 2017-18 u/s.139(1) of the Act. The next aspect to be considered i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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