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TMI Blog2022 (5) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... ake up assessee's appeal in ITA No.1295/Del/2021 pertaining to Assessment Year 2017-18. The assessee has raised following grounds of appeal:- 1. "That under the facts and circumstances of the case the Ld.CIT(A) has erred in law as much as in fact in upholding the addition of Rs.22,11,593/- made on account of disallowance of belated payment of employee's contribution towards ESI/PF. While upholding the disallowance Ld. CIT(A) has failed to appreciate that the disallowance could not be made: a. As the payment towards employee's contribution of ESI and PF have been made either during the financial year under consideration or before the due date of filing of return as described in section 139(1) of Income Tax Act, 1961. As per the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act and insertion of Explanation 5 to section 43B of the Act by the Finance Act, 2021 is not clarificatory in nature and being casting a new obligation or interpretation of law against the existing decision of jurisdictional High Court, retrospectivity cannot be attached particularly when statute itself has made these amendments applicable only from April 1, 2021 and it has been specifically been stated that these will apply to AY 2021-22 and subsequent assessment years as per clause 8 and 9 of the Memorandum to the relevant Finance Act. 2. That under the facts and in the circumstances of the case, keeping in view the above position of law, the disallowance of Rs. 22,11,593/- confirmed by the CIT(A), NFAC is liable to be deleted. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs AIMIL Ltd. 321 ITR 508 and stated that that these binding precedents have been followed by the various Benches of the Tribunal. 7. Per contra, Ld. Sr. DR vehemently opposed these submissions and submitted that law is clear in this respect and he relied upon the decision of Ld.CIT(A). He further relied upon the decision of Hon'ble Delhi High Court in the case of CIT vs Bharat Hotels Ltd. [2019] 103 Taxmann.com 295 (Delhi) wherein the Hon'ble High Court has decided the issue in favour of the Revenue by observing as under:- 8. "Having regard to the specific provisions of the Employees‟ Provident Funds Act and ESI Act as well as the concerned notifications which granted a grace period of 5 days (which appears to have been late w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te 'was very much implicit in the existing explanation 1 of Sec 36(1)(va) even prior to the amendment. More clarity has been brought about and the existing interpretation has indeed been reconfirmed through this amendment by way of insertion of explanation. 2. A harmonious construction will not emerge if these amendments were to be construed as prospective. Therefore, relying on the principles of interpretation of statutes as has been adumbrated by Hon'ble Apex Court supra, it is to be held that the clarification brought out by explanation 2 to Sec. 36(1)(va) will equally hold good for the AYs prior to 2021-22. 6. In view of detailed discussions made at paragraph 5.2 to 5.16 above, I am of the considered view that the disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, no substantial question of law arises for consideration in this appeal. The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act." Therefore, respectfully following the ratio laid down by the Hon'ble Jurisdictional High Court in the above-mentioned binding precedents, we hereby direct the Assessing Officer to delete the disallowance. Thus, grounds raised by the assessee are allowed. 11. In the result, the appeal of the assessee is allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of jurisdictional High Court is available on any issue then the law laid down by the jurisdictional High Court will prevail upon the decisions of non-jurisdictional High Courts. The decision of Jurisdictional High Court in the case of CIT vs. Aimil Ltd. [supra] is applicable to the assessee's case and this decision has again been followed by the Hon'ble Delhi High Court In the case of PC IT vs Pro Interactive Services (India) Pvt. Ltd. decision dated September 10, 2018 in ITA No. 938/2018. Therefore, the decisions of non-jurisdiction High Courts referred to by the Ld. CIT, NFAC cannot be relied upon to hold the issue against the assessee. c. That Ld. CIT, NFAC has failed to appreciate that the amendment brought by the statut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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