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TMI Blog2022 (2) TMI 1202X X X X Extracts X X X X X X X X Extracts X X X X ..... instant case. See SHRI GOPALAKRISHNA ASWINI KUMAR [ 2021 (10) TMI 952 - ITAT BANGALORE] . Thus addition by way of adjustment while processing the return of income u/s 143(1) so made by the CPC towards the deposit of the employees s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted - Decided in favour of assessee. - ITA. No. 229 to 232/JP/2021 - - - Dated:- 24-2-2022 - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Shri Nikhilesh Kataria (C.A.) For the Revenue : Smt. Monisha Choudhary(JCIT) ORDER PER: SANDEEP GOSAIN, J.M. All these above appeals by the different assessees are directed against the separate orders of the CIT(Appeal), National Faceless Appeal Centre, (NFAC), Delhi, as per following details: Sl.No. Appeal No. Name of Case CIT(Appeal / s ) Order dt. 1. ITA No. 229/JP/2021 Deepak Hassani CIT(A), NFAC, Delhi 18/10/2021 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee in this appeal relates to confirmation of the disallowance of ₹ 2,70,396/- made by the A.O. on account of late payments towards EPF and ESI under section 36(1)(va) of the Income Tax Act, 1961 (for short the Act ), however, before furnishing the return of income under section 139(1) of the Act. When the matter was taken to the Ld. CIT(A) the said disallowance was sustained. 5. Now the assessee is in appeal before the ITAT. 6. During the course of hearing, the ld. AR submitted that the assessee deposited employee s contribution of PF/ESI though with a delay of few days from the due dates mentioned in the respective Acts, however the same was deposited well before the due date of filing of return of income. 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 and in support, reliance was placed on the Hon ble Rajasthan High Court decision in case of CIT vs. Rajasthan State Beverages Corporation Ltd. (2017) 392 ITR 2 and CIT vs. State Bank of Bikaner and Jaipur (2014) 43 taxmann.com 411. It was further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d therein. The ld. DR accordingly submitted that in view of the unambiguous wording of the now amended provisions of Section 36(1) and 43B, it is clear that the employee s contribution can be allowed as a deduction only if it had been paid within the prescribed due dates under the relevant welfare funds and this position of law is and has always been the case and the clarification brought about by the amendment clearly apply retrospectively. It was therefore rightly held by the ld CIT(A) that the disallowance made U/s 143(1) of the Act by CPC on account of assessee s failure to pay the employees contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) is strictly in accordance with law and clearly comes under the prima facie adjustments as envisaged U/s 143(1)(a)(iv) of the Act. 8. We have heard the rival contentions and perused the material available on record. In case of Mohangarh Engineers and Construction Company vs DCIT, CPC (Supra), the Coordinate Bench of the Tribunal has dealt with the identical matter relating to employee s contribution towards ESI/PF and the findings of the Coordinate Bench therein read as under: 13. We have heard the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Act, 1987 made effective from 01/04/1988, the words numbered as clause (a), (c), (d), (e) and (f), are omitted from the above proviso and, furthermore second proviso was removed by Finance Act, 2003 therefore, the deduction towards the employer's contribution, if paid, prior to due date of filing of return can be claimed by the assessee. In our view, the explanation appended to Section 36(1)(va) of the Act further envisage that the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under Section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that Sec.43B starts with a notwithstanding clause would thus override 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight of aforesaid discussion and in the entirety of facts and circumstances of the case, the addition by way of adjustment while processing the return of income u/s 143(1) amounting to ₹ 4,38,530/- so made by the CPC towards the delayed deposit of the employees s contribution towards ESI and PF though paid well before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted as the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act in view of the binding decisions of the Hon ble Rajasthan High Court. 9. In the instant case, admittedly and undisputedly, the employees contribution to ESI and PF collected by the assessee from its employees have been deposited well before 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 wi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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