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TMI Blog2022 (10) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... ER S. RIFAUR RAHMAN ( 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 11.06.2022 for the A.Y.2018-19. 2. Assessee has raised following grounds in its appeal: - A. CONFIRMING ADDITION UNDER SECTION 36(1)(va) OF THE INCOME TAX ACT, 1961 ON ACCOUNT OF LATE PAYMENT OF PROVIDENT FUND CONTRIBUTION RS.12,18,781/ 1. On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre, Delhi [ the CIT (A) ) erred in confirming disallowance under section 36(1)X(va) of the Income Tax Act, 1961 (the Act) made by the Assessing Officer. 2. In doing so, the CIT(A) has erred in concluding that the amendments in Section 36(1)(va) and Section 438 brought in by the Finance Act, 2021 is retrospective; ignoring the submissions made and authorities relied upon by the Appellant which have held the amendments to be prospective. 3. The CIT(A) has also erred in not following the settled principle that when judgments giving different interpretations on an issue are available, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be setaside, quashed or modified on the grounds deduced above. 14. The Appellant craves leave to add, modify or delete any ground at or before the hearings. 3. In spite of issue of notice none appeared on behalf of the assessee nor any adjournment was sought. Thus, we proceed to dispose off this appeal with the assistance of Ld.DR. 4. Ld. DR brought to our notice the relevant facts on record and vehemently supported the orders of the authorities below. 5. Considered the submissions of the Ld.DR and material placed on record, we observed that the assessee for the various reasons could not deposit the employees contribution to provident fund within the time allowed under prescribed Act. Whereas, the assessee has deposited the amount before filing of the return of income u/s. 139(1) of the Act and there is a delay in depositing the employees contribution to provident fund. The assessee has complied with the provisions of Law and deposited the contributions before the due date 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. The fact remains that the provisions/explan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 fifteen 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 sub-section (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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 7. Similarly, in the case of Shri Satish Kumar Sinha v. ITO in ITA No. 293/Hyd/2021, A.Y 2019-20 order dated 23.08.2021, the Hyderabad Bench 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 consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 . Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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