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TMI Blog2022 (4) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... disha Vinay, 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 30.08.2021 of CIT(A) (NFAC i.e. National Faceless Appeal Centre) Delhi pertaining to 2018-19 assessment year on the following grounds: 1. That order passed u/s. 250(6) of the Income Tax Act, 1961 by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi is against law and facts. The assessee has already prayed for condonation of delay and no further opportunities is given either to explain or to file affidavit in this regard. 2. That the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has wrongly disallowed ₹ 116244/- on account of ESI and PF without considering the judgment of Jurisdictional High Court in the case of CIT vs. Hernia. Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167 and also the judgment of this Honble ITAT Chandigarh in the case of DCIT vs. Malwa Cotton Spinning Mills (ITA No. 431 to 433/Chd/2017; 07.09.2018). 3. That the appellant prays for leave to add, alter, amend and/or vary the grounds of appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ospectively. 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 that the return was filed by the assessee within the due date as per the time limit as set out u/s. 139(1) of the Income Tax Act. Hence, the amount of the employees' contribution of the EPF amounting to ₹ 5,24,104/- stood paid before the filing of the return. It is seen that the disallowance made was sustained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the respective ESI and PF statue however, same was deposited before the due date of filing of return of income. Therefore, the Id. 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 the Hon'ble Delhi High Court in case of CIT vs. M/s. Bharat Hotels Ltd. 410 ITR 417 wherein the issue is decided in favour of the revenue, without considering the decision of the Hon'ble Delhi High Court in case of CIT vs. AIMIL Ltd. (2010) 321 ITR 508 (Del.). But the Ld. AR relied upon the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 filing of the return of an income but beyond the due date prescribed Under the respective provident fund and ESI laws is not sustainable in law. 9. In the result, appeal of the assessee is allowed. 5. We further find that the Chandigarh Benches also consistently following the decisions of the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 Finance Act, 2021, it has been held that the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Accordingly, considering the factual backdrop of the present case and considering the amendments in Section 36(1)(va) as well as Section 43B carried out by Finance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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