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TMI Blog2022 (8) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... t will not have application for the relevant assessment year, namely assessment year 2018-19. Accordingly, we direct the A.O. to grant deduction in respect of employees' contribution to PF and ESI since the assessee has made the payment before the due date of filing of return u/s 139(1) - Decided in favour of assessee. - ITA No. 530/Bang/2022 - - - Dated:- 2-8-2022 - SMT. BEENA PILLAI , JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU , ACCOUNTANT MEMBER Assessee by : None Revenue by : Shri K. R. Narayana , Addl. CIT ( DR ) ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal by the assessee has been filed by assessee against the order dated 27/09/2021 u/s. 250 passed by the National Faceless Appeal Centre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is engaged in the business of manpower supply and other related services. For the assessment year 2018-19, return of income was filed on 28/10/2018 declaring gross total income of Rs.70,90,55,020/-. The return was processed u/s 143(1) of the I.T.Act. In the intimation issued u/s 143(1) of the I.T.Act, the CPC disallowed the employees' contribution to PF and ESI to the tune of Rs.43,24,284/-. The reason for making the disallowance was that the assessee did not remit the employees' contribution to PF and ESI within the due date specified under the respective Acts. 3. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A). Before the Ld.CIT(A), it was submitted that the assessee remitted the employees contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. We have heard rival submissions and perused the material on record. An identical issue was considered by the Tribunal in the case of The Continental Restaurant Caf Co. v. ITO (supra). The relevant finding of the Tribunal reads as follows:- 7. I have heard rival submissions and perused the material on record. Admittedly, the assessee has not remitted the employees' contribution of PF of Rs.1,06,190 and ESI of Rs.16,055 totaling to Rs.1,22,245 before the due date specified under the respective Act. However, the assessee had paid the same before the due date of filing of the return u/s 139(1) of the I.T.Act. The Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT reported in 366 ITR 408 (Kar.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2021-2022 onwards. The following orders of the Tribunal had categorically held that the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 is only prospective in nature and not retrospective. (i) Dhabriya Polywood Limited v. ACIT reported in (2021) 63 CCH 0030 Jaipur Trib. (ii) NCC Limited v. ACIT reported in (2021) 63 CCH 0060 Hyd Tribunal. (iii) Indian Geotechnical Services v. ACIT in ITA No.622/Del/2018 (order dated 27.08.2021). (iv) M/s.Jana Urban Services for Transformation Private Limited v. DCIT in ITA 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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