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TMI Blog2022 (4) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... ribution to PF&ESI totalling Rs. 7,71,710/- although the same was paid within the date of filing returns. 2. That the NFAC has erred in law and on facts in confirming the charging of interest of Rs. 4,54,728/- under Section 234B and Rs. 98,243/- under Section 234C. 3. That the assessee craves leave to alter/amend any grounds of appeal and to take additional grounds before or at the time of hearing of the appeal." Assessment Year 2018-19: "1. That the NFAC has erred in law and on facts in confirming disallowance of expenditure of Rs. 2,58,270/- being TDS late payment interest under section 37. 2. For that the erred in law and on facts in not giving specific directions to allow claim under section 43B of Rs. 8,43,343/- paid this year (AY 2018-19) on payment basis attach added Bank in earlier years. 3. That the NFAC has erred in law and on facts in confirming disallowance of employees' contribution to PF&ESI totalling Rs. 11,64,817/-. Although the same was paid within the date of filing returns. 4. That the NFAC has erred in law and on fats in confirming the charging of interest u/s 23A Rs. 20,246/- and of Rs. 2,20,480/- under section 234B and Rs. 102244 under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue date as prescribed by the respective statutes (PF and ESI Act). So after the amendment has been inserted according to Shri Miraj D Shah takes effect from 1st April, 2021 i.e. AY 2021-22 and subsequent assessment year and if the remittance of PF/ESI Employees' Contribution is not made within the time prescribed by the PF/ESI Act then the remittance cannot be allowed as a deduction which is prospective in operation. Whereas according to Ld. CIT(A), the amendment brought in is clarificatory in nature so, retrospective in operation. So we have to adjudicate this issue whether the amendment brought in by Finance Act, 2021 is prospective or retrospective in operation. We note that before this amendment has been inserted by Finance Bill, 2021, the Hon'ble Jurisdictional Calcutta High Court in the case of Shri Vijayshree Ltd. Ltd.(supra), M/s Philips Carbon Black Ltd.(supra), M/s Coal India Ltd.(supra), M/s Akzo Nobel India Ltd. (supra) has held that the payment of employees' contribution if made by an assessee before the due date of filing of return of income u/s 139(1) of the Act, is allowable as a deduction. We note that by Finance Act, 2021, the provision of Section 36(1)(va) as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his issue as discussed is prospective and Ld. CIT(A) erred in holding otherwise. So till AY 2021-22, the Jurisdictional High Court's view in favor of assessee will hold good and is binding on us. As discussed the decision of the Hon'ble Delhi High Court in Bharat Hotels Ltd. (supra) which was in favor of revenue has not considered the decision of the Co-ordinate Division Bench decision in M/s Aimil Ltd.(supra) which is in favour of assessee. So we note that later decision of the Delhi/Hyderabad Tribunal have followed the decision favouring assessee in the light of the Hon'ble Supreme Court decision in M/s Vegetable Products (supra). In the light of the aforesaid decision and relying on the ratio of the Hon'ble Supreme Court in the case of Vatika Township Pvt. Ltd. (supra) and M/s Snowtex Investment Ltd. (supra) and also taking note of the binding decision of the Hon'ble Jurisdictional Calcutta High Court on this issue before us in Shri Vijayshree Ltd. Ltd.(supra), M/s Philips Carbon Black Ltd.(supra), M/s Coal India Ltd.(supra), M/s Akzo Nobel India Ltd. (supra), we set aside the impugned order of Ld CIT(A) and direct the AO to allow the claim of deduction in respect of employees' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee has claimed that ld. CIT(A) erred in not allowing the deduction for fee paid u/s 234E of the Act for delay in filing of quarterly returns. 15. Before us, the ld. Counsel for the assessee stated that this issue deserves to be allowed in favour of the assessee in view of the decision of this Tribunal in the case of Narayani Ispat Pvt. Ltd. (supra). We find that this Tribunal has adjudicated the very same issue observing as follows: "7. We have heard the rival contentions of both the parties and perused the material available on record. In the instant case, AO has disallowed the interest expenses incurred by the assessee on account of late deposit of service tax and TDS after having reliance on the judgment of Hon'ble Supreme Court in the case of Bharat Commerce Industries Ltd. Vs. CIT (1998) (Supra). The relevant extract of the judgment reads as under: FACTS During the year under consideration, the assessee failed to pay advance tax equivalent to 75 per cent of estimated tax. The Assessing Officer levied interest under section 215 as well as under section 139. The assessee claimed that since taxes which were payable were delayed, the assessee's financial resources ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) is also not allowable deduction. However the facts of the instant case before us are distinguishable as in the case before us the interest was paid for delayed payment of service tax & TDS. The interest for the delay in making the payment of service tax & TDS is compensatory in nature. As such the interest on delayed payment is not in the nature of penalty in the instant case on hand. The issue of delay in the payment of service tax is directly covered by the judgment of Hon'ble Apex Court in the case of Lachmandas Mathura Vs. CIT reported in 254 ITR 799 in favour of assessee. The relevant extract of the judgment is reproduced below : "The High Court has proceeded on the basis that the interest on arrears of sales tax is penal in nature and has rejected the contention of the assessee that it is compensatory in nature. In taking the scud view the High Court has placed reliance on its Full Bench's decision in Saraya Sugar Mills (P.) Ltd. v. CIT [1979] 116 ITR 387 (All.) The learned counsel appearing for the appellant-assessee states that the said judgment of the Full Bench has been reversed by the larger Bench of the High Court in Triveni Engg. Works Ltd. v. CIT [1983] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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