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TMI Blog2022 (6) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... D THAT:- As assessee had made the remittance/payment of employees contribution towards PF ESI before the due date of filing of return of income u/s 139 (1) of the Act. Therefore we are inclined to allow the appeal of the assessee and direct the A.O. to delete the addition and hold that the Amendment brought in Finance Act 2021 w.e.f. 01.04.2021 by inserting an Explanation to section 36(1)(va) and section 43B of the Act is prospective in nature and would apply from AY 2021-22 onwards and, therefore, the Amendment is not applicable to the assessment year under consideration. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... issue in this appeal relates to the disallowance of claim of bad debts of Rs. 84,53,517/- which was made by the ld. Assessing Officer (in short ld. "AO") denying the claim and the same being confirmed by ld. CIT(A). 4. We have heard rival contentions and perused the records placed before us. We notice that the assessee is a limited company. Income of Rs. 28,37,35,921/- has been declared in the e-return of file on 28.09.2012. During the course of assessment proceedings carried out after being selected for scrutiny on the basis of CASS and duly serving of notices u/s 143(2) & 142(1) of the Act, ld. AO noticed that the assessee has claimed bad debts of Rs. 84,53,517/-. This amount was worked out on the basis of short realisation from the debtors. The list is available at page 3 to 4 of the assessment order and as per this list, debtors' closing balance as on 31.03.2011 is 2,88,00,809/- during Financial Year (in short "FY") 2011-12 a sum of Rs. 1,85,15,126/- was realised, Rs. 18,32,166/- was shown as due to be realised and the remaining amount of Rs. 84,53,517/- is claimed as bad debts. Ld. AO disregarded this claim with observation that the assessee has shown almost 30% of the total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave heard rival contentions and perused the records placed before us. According to the authorities below, since the assessee has not remitted the employees' contribution on the due date as prescribed by the PF & ESI Act, the contribution made belatedly cannot be allowed. However, according to the ld. Counsel for the assessee since the assessee has undisputedly made the remittance in respect of alleged employees' contribution of PF as well as ESI before filing of the return of income u/s 139(1) of the Act, no disallowance is warranted. According to the ld. A/R, ld. CIT(A) erred in referring to the Amendment brought in by Finance Act 2021 w.e.f. 01.04.2021 which inserted an Explanation to section 36(1)(va) and section 43B of the Act and erred in holding it as clarificatory and so, retrospective in nature. 13. Whereas according to ld. A/R, it is only prospective in nature and cannot disturb the binding judicial precedents in favour of assessee. According to the ld. A/R, this issue is no longer res-integra as held by this Tribunal in the case of Lumino Industries Ltd. vs. ACIT, Circle-5(1), Kolkata in I.T.A. No.365/Kol/2021 for AY 2015-16 order dated 17.11.2021, wherein assessee's fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d payment of employees' contribution. In order to test whether the amendment brought in later is retrospective or not one has to apply the test as laid by the Hon'ble Supreme Court in the case of M/s Snowtex Investment Ltd. (supra) wherein the Hon'ble Supreme court took note of the law laid down on this issue by the Constitution Bench in M/s Vatika Township Ltd. and held that the intent of the Parliament/legislature need to be looked into for ascertaining whether the amendment should be retrospective or not. In Vatika Township Ltd. (supra) the Hon'ble Supreme Court held that the notes on clauses appended to the Finance Bill will throw light as to the legislative intent; because it has to be borne in mind that Parliament/legislature is aware of three concepts before an amendment is brought in, which can be discerned from reading of the "Notes on Clauses" to the Bill which are (i) prospective amendment with effect from a fixed date; (ii) retrospective amendment with effect from a fixed anterior date; and (iii) clarificatory amendments which are retrospective in nature. So when we adjudicate whether the view of Ld CIT(A) that the explanation 2 brought in by Finance Act, 2021 is retros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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