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TMI Blog2022 (10) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... AHMAN (AM) 1. This appeal is filed by the assessee against order of Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter for short Ld. CIT(A)] dated 01.10.2021 for the A.Y.2019-20. 2. Assessee has raised following grounds in its 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 addition of the employees contribution to PF/ESIC payment of Rs. 4,43,496/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. 2. On the facts and circumstanoes of the case and in law, the learned CIT erred in confirming order dated 10/04/2021 of CPC Bangalore in respect of disallowance of PF/ESIC employees contribution amounting to Rs. 4,43,496/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 circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of filling the Return of income u/s.139(1) of the Act which cannot be disputed. The Ld.DR submitted that the amendment is retrospective applicable but the assessee submissions are that the amendment has come w.e.f 01.04.2021 and the same is applicable prospectively. The fact remains that the provisions/explanation was introduced in the Finance Act, 2021 which is effective from 01.04.2021. 6. Considering the rival submissions and overall facts, circumstances, the judicial precedents filed on the similar issue, the Bangalore Bench in the case of M/s. BI Worldwide India Pvt Ltd. v. 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 No. 3, Para No. 9 10 of the order which is read as under and allowed the appeal: 9. 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' contribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 v. CIT reported in (2021) 436 ITR 582 (SC) had held that retrospective provision in a taxing Act which is for the removal of doubts cannot be presumed to be retrospective, if it alters or changes the law as it earlier stood (page 597). In this case, in view of the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT (supra) the assessee would have been entitled to deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 disallowance before learned CIT(A) but he raised an additional ground before us challenging the said disallowance. It is the contention of the assessee that the employees contribution to ESI and PF though, was not paid within the due date as prescribed under section 36(1)(va) but such dues having been paid before the due date of filing of return of the income as prescribed under section 139(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 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 allowed. 3. In the result, assessee s appeal is allowed. 8. Respectfully following the above ratio of judicial decisions and the facts emanated in the course of hearing we find that the amendment was brought in Finance Act, 2021 w.e.f 01.04.2021. The law was not framed/amended in the relevant Assessment year and any legal proposition which cast additional burden/liability on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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