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TMI Blog2022 (4) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... .07.2020. On appeal, the ld. CIT(A), NFAC has confirmed the disallowance made U/s 143(1) on account of assessee's failure to pay the employee's contribution of EPF within the prescribed due dates as per Section 36(1)(va) of the Act. Against the said order, the assessee is in appeal before us. 3. During the course of hearing, the ld. AR submitted that the assessee-company deposited employee's contribution of EPF 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 under section 139(1) of the IT Act. 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 thereof, the ld. A/R submitted that recently the Jaipur Bench of the Tribunal in various cases viz. Group Zero in ITA No. 250/JP/2021, Karni Kehar Security Co-operative Society Ltd. in ITA No. 310/JP/2021, Devi Shanker in ITA No. 35/JP/2022 has also taken a similar view. The ld. A/R placed reliance on the decision of Hon'ble Rajasthan High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow 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. 5. 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), 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bove 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 due date under the respective enactments by the assessees and not under the due date of filing of return. 22. We have alre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income u/s 143(1) amounting to Rs. 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." 6. In the instant case, admittedly and undisputedly, the employees' contribution to EPF 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 will accordingly apply to assessment year 2021-22 and subsequent assessment years". In the instant case, the impugned assessment year is assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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