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TMI Blog2022 (2) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... following the decisions of various High Courts as well as Coordinate Benches of the Tribunal the addition made by way of adjustment while processing the return of income u/s. 143(1) 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. - Decided in favour of assessee. - ITA Nos. 392, 393 & 116/Chd/2021 - - - Dated:- 11-2-2022 - Diva Singh, Member (J) And Vikram Singh Yadav, Member (A) For the Appellant : Vineet Krishan, Adv. For the Respondents : Priyanka Dhar, Sr. DR ORDER Per Bench These are three appeals filed by the aforesaid assessees against the respective orders of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre Delhi [in short the 'Ld. CIT(A), NFAC'] Delhi, passed u/s. 250 of the Income Tax Act, 1961 (in short 'the Act') dated 08.10.2021, 18.08.2021 and 31.03.2021 relating to assessment years 2017-18, 2018-19 and assessment year 2019-20 respectively. 2. Since common issues are involved in all the three appeals, these were heard together and are being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der: 5. We have heard the rival contentions and pursued the material available on record. In case of Mohangarh Engineers and Construction Company Vs. DCIT, CPC (Supra), speaking through one of us, we have extensively dealt with the identical matter relating to employee's contribution towards ESI/PF and our findings therein read as under: 13. We have heard the rival contentions and perused the material available on record. On perusal of the details submitted by the assessee as part of its return of income, it is noted that the assessee has deposited the employees's contribution towards ESI and PF well before the due date of filing of return of income u/s. 139(1) and the last of such deposits were made on 16.04.2019 whereas due date of filing the return for the impugned assessment year 2019-20 was 31.10.2019 and the return of income was also filed on the said date. Admittedly and undisputed, the employees's contribution to ESI and PF which have been collected by the assessee from its employees have thus been deposited well before the due date of filing of return of income u/s. 139(1) of the Act. 14. The issue is no more res Integra in light of series of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rride Sec. 36(1)(va) and if read in isolation Sec. 43B would become obsolete. Accordingly, contention of counsel for the revenue is not tenable for the reason aforesaid that deductions out of the gross income for payment of tax at the time of submission of return under Section 139 is permissible only if the statutory liability of payment of PF or other contribution referred to in Clause (b) are paid within the due date under the respective enactments by the assessees and not under the due date of filing of return. 22. We have already observed that till this provision was brought in as the due amounts on one pretext or the other were not being deposited by the assessees though substantial benefits had been obtained by them in the shape of the amount having been claimed as a deduct/on but the said amounts were not deposited. It is pertinent to note that the respective Act such as PF etc. also provides that the amounts can be paid later on subject to payment of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the due date of filing of return of income u/s. 139(1) of the Act. Further, the Ld. D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, we find that there are express wordings in the said memorandum which says these amendments will take effect from 1st April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years . In the instant case, the impugned assessment year is assessment year 2019-20 and therefore, the said amended provisions cannot be applied in the instant case. Similar view has been taken by the Coordinate Bangalore Benches in case of Shri Gopalkrishna Aswini Kumar vs. ACIT (supra) wherein it has held as under:- 7. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f filing of the return u/s. 139(1) was held to be not relevant. It is seen that the said issue as far as the present Forum is concerned, stands fully covered in favour of the assessee 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 and have held that the amendment is applicable in relation to the assessment year 2021-22 and subsequent years and not retrospectively. Thus, in view of this legal position as considered by the Coordinate Benches and taking note of the decisions of the jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o infirmity in the order passed by the Ld. CIT(A) wherein he has sustained the disallowance made u/s. 143(1) of the Act, by the CPC on account of assessee's failure to pay the employees' contribution towards ESI and PF within the prescribed due dates as per section 36(1)(va) of the Act. He accordingly supported the order of the lower authorities. 9. We have heard the rival contentions and perused the material available on record. In the instant case, it is not in dispute that employees' contribution to ESI and PF collected by the assessee from its employees had been deposited well before the due date of filing of return of income u/s. 139(1) of the Act. We find that the issue is squarely covered by the decisions of the Hon'ble Rajasthan High Court, Hon'ble Himachal Pradesh High Court as well as Hon'ble Punjab Haryana High Court. We further note that though the Ld. CIT(A) has not disputed the various decisions of Hon'ble High Courts including the decision of the jurisdictional Himachal Pradesh High Court but has referred to the amendment brought in by the Finance Act, 2021. It is a consistent position across various Benches of the Tribunal including ..... X X X X Extracts X X X X X X X X Extracts X X X X
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