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TMI Blog2022 (7) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... w section 36(1) (va) of Income Tax Act, 1961 read with section 2(24) (X) of the Income Tax Act, 1961 without considering Clause of Finance Bill 2021 which clarify that amendment is effective from the A.Y. 2021-22 but the CIT Appeal has considered that it is retrospective amendment. 2. On the facts and circumstances of the case and in law, the learned CIT erred in confirming order of CPC Bangalore in respect of disallowance of PF/ESIC employees contribution amounting to Rs. 10,17,767/- on the ground that 143(1) allows to rectify apparent mistake however issue is highly debatable hence order in bad in law. 3. On the facts and circumstances of the case and in law, the learned appeal erred in not following decision of jurisdiction High Court therefore order is bad in law. 4. On the facts and circumstances of the case and in law, the learned CIT erred in not considering favourable decision when 2 views on any issue, view favourable to the assessee to be preferred. 5. The CIT Appeal erred in not applying the Doctrine of Promissory estoppels which is clearly applicable in Finance Bill 2021 Note explaining 1 is added u/s 36 (1)(v) of Finance Bill 2021 with effect from 2021 and is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ESIC within the time allowed under prescribed Act. Whereas, the assessee has deposited the amount before filing of the return of income U/sec139(1) of the Act. The Ld. AR referred to the chart at page 2 referred in the A.O. order, whereas there is a delay in depositing the employees contribution to provident fund of Rs.9,78,295/-and the employees contribution to ESIC Rs.39,470/-.The assessee has complied with the provisions of Law and deposited the contributions before the due date of filling the Return of income U/sec139(1) of the Act which cannot be disputed. The Ld.DR submitted that the amendment is retrospective applicable but the Ld.AR submissions are that the amendment has come w.e.f 1-4-2021and the same is applicable prospectively. The fact remains that the provisions/explanation was introduced in the Finance Act 2021 which is effective from 1-4-2021. 8. We considering the overall facts, circumstances and the submissions find on the similar issue the Hon'ble Tribunal in the case of M/s BI Worldwide India Pvt Ltd. Vs. DCIT in ITA No.433/Bang/2021 dated 04.01.2022. A.Y.2018-19 has considered the facts and provisions of law has observed at page 3 Para 9 & 10 of the order whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return of income under subsection (1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 21. The submission of Mr.Aravind, learned counsel for the revenue that if the employer fails to deduct the employees' contribution on or before the due date, contemplated under the provisions of the PF Act and the PF Scheme, that would have to be treated as income within the meaning of Section 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. WE agree with the view taken by this Court in W.A.No.4077/2013. 23. In the result, the appeal is allowed and the substantial question of law framed by us is answered in favour of the appellant-assessee and against the respondent-revenue. There shall be no order as to costs." 7.2 The further question is whether the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 is clarificatory and declaratory in nature. The Hon'ble Supreme Court in the recent judgment in the case of M.M.Aqua Technologies Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bution to PF and ESI since the assessee made the payment before the due date of filing of return u/s 139(1) on 30.11.2018 of the Act. Accordingly, grounds raised by assessee stands allowed. 9. Similarly in the case of Shri Satish Kumar Sinha Vs. ITO in ITA No.293/Hyd/2021, A.Y 2019-20 order dated 23.08.2021, the Hon'ble Tribunal has observed at Para 3.5 as under: 3.5. We have heard both the parties through video conference and gone through the material placed on record. In the instant case, there is no dispute that the amounts- in-question with regard to EPF and ESI were remitted to the concerned accounts before the due date of filing the return of income u/sn139(1). This, the Tribunal has consistently taken a view that if the PF and ESI are remitted to the respective accounts, the same are required to be allowed as deduction. In the case of KLR Industries Ltd., Vs. DCIT (2017) [83 taxmann.com 322] (Hyd), the Tribunal held as under: "34. The A.O. disallowed the expenditure claimed by observing that the assessee has not remitted the employees contribution to PF and ESI within the prescribed date as mentioned in section 36(1)(va). Though, the assessee did not challenge the disal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid judgment and against the revenue". Against which the revenue has filed SLP before the Hon'ble Supreme Court, which was dismissed by the Hon'ble Apex Court in (2017) [85 taxmann.com 185]. Therefore, taking the consistent view and respectfully following the view taken by the Co-ordinate Bench of the ITAT in the case of KLR Industries Ltd., Vs. DCIT (supra), we hold that no disallowance could be made in respect of employees contribution of PF and ESI if the same are deposited before the due date of filing the return of income. Accordingly, we set aside the order of Ld.CIT(A) and delete the addition made by the AO. The appeal of the assessee on this ground is allowed". Respectfully following the same, I set aside the order of the CIT (A) and delete the addition made by the Assessing Officer on this issue". 2. Respectfully following the same, I hold that since the assessee has deposited the Employees Contribution to the PF and ESI before the date of filing the return of income, as per the ITA No. 293 of 2021 Satish Kumar Sinha Hyderabad amended provision applicable to the to the relevant A.Y, the same is not to be disallowed. Assessee's appeal is accordingly allowe ..... 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