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TMI Blog2022 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s. 139(1) - Decided in favour of assessee. - ITA No. 5/Bang/2022 - - - Dated:- 7-4-2022 - SHRI B. R. BASKARAN , ACCOUNTANT MEMBER For the Appellant : Joseph Verghese, A.R. For the Respondents : Ganesh R. Ghale, Standing counsel ORDER Per B. R. Baskaran, Accountant Member The assessee has filed this appeal challenging the order passed by Ld. CIT(A), National Faceless Appeal Centre, Delhi and it relates to the assessment year 2018-19. The only issue urged in this appeal relates to disallowance of Rs. 67,99,524/- being employees contribution to provident fund and employees state insurance, u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date prescribed u/s. 139(1) of the Act in the year under consideration. 5. The question whether the payment made beyond the due date prescribed under respective statutes, but before the due date prescribed u/s. 139(1) of the Income tax Act was considered and decided in favour of the assessee by the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DICT in ITA No. 385/Bang/2021 (order dated 21.10.2021). The learned Departmental Representative supported the order of the Income Tax Authorities. 6. I heard both parties and perused the record. On identical facts, the Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT (supra) by following the dictum laid down by the Hon'ble jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer in denying the appellant's claim of deductions of the employees contribution to PF/ESI alleging that the payment was not made by the appellant in accordance with the provisions u/s. 36[1][va] of the I.T.Act? 7.1 In deciding the above substantial question of law, the Hon'ble High Court rendered the following findings:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d held that retrospective provision in a taxing Act which is for the removal of doubts cannot be presumed to be retrospective, if it alters or changes the law as it earlier stood (page 597). In this case, in view of the judgment of the Hon'ble jurisdictional High Court in the case of EssaeTeraoka (P.) Ltd. v. DCIT (supra) the assessee would have been entitled to deduction of employees' contribution to ESI, if the payment was made prior to due date of filing of the return of income u/s. 139(1) of the I.T.Act. Therefore, the amendment brought about by the Finance Act, 2021 to section 36[1][va] and 43B of the I.T.Act, alters the position of law adversely to the assessee. Therefore, such amendment cannot be held to be retrospective in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. DCIT (supra), the employees' contribution paid by the assessee before the due date of filing of return of income u/s. 139(1) of the I.T. Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee and the disallowance made by the Assessing Officer is deleted. 8. The Ld. A.R. also raised a legal issue contending that the impugned addition would not fall under the category of adjustments that could be made while processing the return of income u/s. 143(1) of the Act. Since, I have decided the issue on merit in favour of the assessee, there is no necessity to decide this legal issue. 9. The Ld. D.R. submitted that the Hon'ble Gujarat High Court has taken a contrary view on this issue in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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