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TMI Blog2022 (3) TMI 1127X X X X Extracts X X X X X X X X Extracts X X X X ..... hare of ESIC and PF u/s. 43B r.w.s. 36(1)(va) of the Act by the revenue authorities. 3. The assessee is engaged in the business of execution of works contract. It filed return of income u/s. 139(1) on 31.10.2018 admitting an income of Rs. 1,25,15,190. The AO under intimation u/s. 143(1) of the Act disallowed the ESI and PFI remittances made by the assessee on the ground of belated payments. The CIT(Appeals), NFAC confirmed the order of the AO. Against this the assessee is in appeal before us. 4. The Ld. AR submitted that the payment of employee contribution to ESI and PF though belated, but was before the due date of fling the return of income u/s. 139(1) and otherwise allowable u/s. 43B of the Income-tax Act, 1961 [the Act]. 5. The Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished by the assessee along with such return. In short, this provision states, notwithstanding anything contained in any other provision contained in this Act, a deduction otherwise allowable in this Act in respect of any sum payable by the assessee as an employer by way of contribution to any fund such as provident fund shall be allowed if it is paid on or before the due date as contemplated under Section 139(1) of the IT Act. This provision has nothing to do with the consequences, provided for under the PF Act/PF Scheme/ESI Act, for not depositing the "contribution" on or before the due dates therein. 16. In the present case, admittedly, though the employer did not deposit the contribution, within the stipulated time, as contemplated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution" is used not only to mean contribution of the employer but also contribution to be made on behalf of the member employed by the employer directly. 20. Paragraph-38 of the PF Scheme provides for Mode of payment of contributions. As provided in sub-para (1), the employer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fund or the fund under the ESI Act within fifteen days of the closure of every month pay. It is clear that the word "contribution" used in Clause (b) of Section 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fication issued thereunder or under any standing order, award, contract of service or otherwise." Prior to the above clause was inserted to section 36 giving statutory deductions of payment of tax under the provisions of the Act, section 43B(b) was inserted by the Finance Act, 1983, which came into force with effect from April 1, 1984. Therefore, again the provision of section 43B(b) clearly provides that notwithstanding anything contained in the other provisions of the Act including section 36(1) clause (va) of the Act, even prior to the insertion of that clause the assessee is entitled to get statutory benefit of deduction of payment of tax from the Revenue. If that provision is read along with the first proviso of the said section which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed upon the decision of the apex court in Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677 and also on the decision in General Finance Co. v. CIT (Asst.) [2002] 257 ITR 338 (SC) in respect of applicability of section 43B(b) and also omission of clause (a) or (c) or (d) or (e) or (B referred to above occurred in the first proviso to section 43B, supports the case of the assessees and also relevant paragraphs extracted from Allied Motor's case [1997] 224 ITR 677 and paragraph 59 referred to supra in this judgment from the Finance Bill with all fours supports the case of the assessee/respondents. Therefore, we have to answer the substantial question of law No. 1 framed by this court in these appeals at the instance of the Revenue against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Ld. DR contention is that as per sec. 43B(b) of the Income-tax Act and explanatory notes to Finance Act 1983, that Employees' Contribution was never intended to be covered by sec. 43B. This has been reiterated and reinforced through Explanation 5 to sec. 43B and Explanation 2 to 36(1)(va) inserted by Finance Act 2021. If it was the intention of the legislature expressly made clear in the Finance Act 2021, through the explanatory notes, it would necessarily to be held that Explanation 5 to sec. 43B and Explanation 2 to sec. 36(1)(va) would apply to all pending matters as on date. 12. We find no merit in the argument of the Ld. DR since the explanation as provided in Finance Act 2021 prescribes that the amendment in both sec. 36(v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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