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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 ..... For the Responden : Mr. Love Kumar.DR ORDER PER PAVAN KUMAR GADALE, JM: These are the appeals filed by the assessee against the separate orders of the National Faceless Appeals Centre (NFAC), Delhi passed u/s 143(3) and 250 of the Act. Since the issues in these appeals are common and identical, hence they are clubbed, heard and consolidated order is passed. For the sake of convenience, we shall take up assessee appeal in ITA No. 1958/Mum/2022, for the A.Y 2017-18 as a lead case. The assessee has raised the following grounds of appeal. 1 On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeal) National Faceless Appeal Centre erred in confirming the employees contribution to PF/ESIC payment of Rs. 10, 17,767/- on the ground that payment was not made on time as per explanation below 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Honble Tribunal. 5. At the time of hearing, the Ld. AR of the assessee submitted that the CIT(A) has not considered the facts, law and the asseessee is governed by the law applicable to said Assessment year. Whereas the amended provisions/explanations are with effect from F.Y 1-4-2021.The Ld.AR relied on the judicial decisions and prayed for allowing the appeal. 6. Contra, the Ld.DR submitted that the explanation 2 to Sec 36(1)(va) of the Act in finance Act 2021 was introduced and the amendment is applicable to the earlier years and supported the order of the CIT(A) appeal. 7. We heard the rival submissions and perused the material available on record. The ld. AR s contentions are that the assessee for the various reasons could not deposit the employees contribution to provident fund 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F/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 f if teen days of the closure of every month pay. It is clear that the word contribution used in Clause (b) of Section 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No.307/Bang/2021 (order dated 11th October, 2021) 7.3 In view of the aforesaid reasoning and the judicial pronouncements cited supra, the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 will not have application for the relevant assessment year, namely A.Y. 2019-2020. Accordingly, I direct the A.O. to grant deduction in respect of employees' contribution to PF and ESI since the assessee has made payment before the due date of filing of the return of income u/s 139(1) of the I.T.Act, It is ordered accordingly. 8. In the result, the appeal filed by the assessee is allowed. 10. In view of the judicial pronouncements cited supra, we hold that the amendment to section 36(1)(va) and 43B of the Act will not have application for the relevant assessment year, namely assessment year 2018-2019. Accordingly, we direct the A.O. to grant deduction in respect of employees' contribution 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/H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of claim of Rs.17,80,765/- on account of Provident Fund (PF) and ESI is concerned, this Court has extensively considered the aforesaid two questions in assessee's own case vide judgment and order dt.26.05.2016 referred to (supra) and has held that the privilege fees being a revenue expenditure, is required to be allowed as a revenue expenditure. This court in the aforesaid case has also allowed the claim of the assessee, in so far as payment of PF ESI etc. is concerned, on the finding of fact that the amounts in question were deposited on or before the due date of furnishing of the return of income and taking in consideration judgment of this Court in CIT v. State Bank of Bikaner Jaipur [2014] 363 ITR 70/43 taxmann.com 411/225 Taxman 6 (Mag.) (Raj.) and CIT v. Jaipur Vidhut Vitaran Nigam Ltd. [2014] 363 ITR 307/49 taxmann.com 540/[2015] 228 Taxman 214 (Mag.) (Raj.) and accordingly both the questions are covered by the 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 respectf ..... X X X X Extracts X X X X X X X X Extracts X X X X
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