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TMI Blog2022 (12) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained on the strength of the amendment effected by Finance Act, 2021 to Sections 36(1)(va)/43B of the Act as the legal position thereon is very clear - Decided in favour of assessee. - ITA No. 501/CHD/2022 - - - Dated:- 23-9-2022 - SMT. DIVA SINGH , JUDICIAL MEMBER And SHRI VIKRAM SINGH YADAV , ACCOUNTANT MEMBER Assessee by : Shri Jaspal Sharma , Advocate Revenue by : Smt. Priyanka Dhar , Sr. DR ORDER Per Diva Singh The present appeal has been filed by the assessee wherein the correctness of the order dated 09.05.2022 of the First Appellate Authority sitting as NFAC Delhi pertaining to 2018-19 assessment year is assailed on the following grounds: 1. The impugned order is both against facts and erroneous in law. 2. On the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in having confirmed the disallowance of an amount of Rs. 10,18,881/- on account of late deposit of Provident Fund and ESI. 3. On the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in having held that the reliance of the appellant on the case laws, does not support the case of the appellant in view of the amendments brought in by the F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009 and CIT Vs. Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167 have been considered. It has been held that additions by way of disallowance cannot be made or sustained on the strength of the amendment effected by Finance Act, 2021 to Sections 36(1)(va)/43B of the Act as the legal position thereon is very clear. For ready reference, we quote from order dated 21.04.2022 in Vardhman Textiles Ltd., Ludhiana Vs. DCIT, Ludhiana (ITA 373/CHD/2021) as under: 4. We have heard the rival submissions and perused the material available on record. The said issue has been considered at length by various orders of the ITAT including the Chandigarh Bench in ITA 194/CHD/2021 dated 18.11.2021 in the case of Surya Resorts Pvt. Ltd. Dharamshala, ITA No. 255/CHD/2011 dated 02.11.2021 in the case of CZAR Faucets Limited in ITA No. 255/CHD/2021 order dated 01.11.2021. In the facts of the present case also, it is seen that the amendments carried out by the Finance Act, 2021 in Section 36(1)(va) and 43B were considered by the First Appellate Authority to be clarificatory in nature, hence, retrospective in operation. We have seen that this issue has been considered by the jurisdictional High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Insta Exhibitions Pvt. Ltd. Vs. Addl. CIT, New Delhi in ITA No. 6941/Del/2017 and Hyderabad Benches vide order dated 01.07.2021 in M/s. Crescent Roadways Pvt. Ltd. V. Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018 have held that the amendments are prospective and not retrospective in nature. The reasoning has been addressed at length in the order dated 02.11.2021 in the case of Shri Sukhdev Singh, Mohali Vs. ITO, Chandigarh in ITA 250/CHD/2021 wherein it was held: 4. We have heard the submissions and perused the material available on record. It is seen that the issue is no longer res-integra as the decision of the jurisdictional High Court amongst others has been followed by the ITAT Chandigarh Benches vide its order dated 01.07.2021 in the case of M/s. Jupiter Aqua Lines Pvt. Ltd. Vs. DCIT ITA 83/CHD/2021 and order dated 04.10.2021 in the case of Ajay Piplani Vs. Assistant Director of Income Tax, CPC, Bengaluru in ITA No. 114/CHD/2021. Similar view has been expressed by the Delhi Benches vide order dated 03.08.2021 in Insta Exhibitions Pvt. Ltd. Vs. Addl. CIT, New Delhi in ITA No. 6941/Del/2017, Hyderabad Benches vide order dated 01.07.2021 in M/s. Crescent Roadways Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd. 82 ITR 192 by the Hon'ble Supreme Court. Hence, in light of the latest decision in case of Pro Interactive Service (India) Pvt. Ltd., the issue is covered in favour of the assessee. Hence, Ground No. 1 is dismissed. 7. Further with respect to the argument of the learned departmental representative that amendment made with finance act 2021 wherein explanation 1 is added u/s. 36(1)(va) of the act with effect from 1 April 2021, is applicable to the present case, we referred to the Notes on clauses at the time of introduction of the finance bill 2021 which says as Under:- Clause 8 of the Bill seeks to amend section 36 of the Income-tax Act, relating to other deductions. Sub-section (1) of the said section provides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidering the factual backdrop of the present case and considering the amendments in Section 36(1)(va) as well as Section 43B carried out by Finance Act, 2021 and Memorandum explaining the provisions in Finance Bill, 2021 we hold that the impugned disallowance is not sustainable and is directed to be deleted. The appeal of the assessee is allowed. Said order was pronounced in the presence of the parties via Webex. (emphasis supplied) 5. Similar view has also been taken in order dated 02.11.2021 in the case of M/s. Czar Faucets Limited Chandigarh Vs. DCIT, Bangalore in ITA 255/CHD/2021; in order dated 16.11.2021 in the case of Pooja Sarees, Ambala City in ITA No. 184/CHD/2021 and in order dated 16.11.2021 in the case of M/s. A.K. Creative Outsourcing Services Pvt. Ltd., Baddi in ITA No. 252/CHD/2021. The specific reasoning summing up the legal position on similar facts is extracted hereunder from M/s. A.K. Creative Outsourcing Services Pvt. Ltd.: 5. We have heard the submissions and perused the material available on record. Considering the issue, it is seen that it is no longer res-integra. The controversy whether the Amendments carried out by the Finance Act, 2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n despite late payment qua the specific Act cannot be made. Admittedly, in the facts of the present case the payment has been made well within the time line as set out under the Income Tax Act u/s. 139(1) of the Income Tax Act. Thus, admittedly the return of income was filed well within time after making the specific payments. The position of law that the Amendments carried out by the Finance Act, 2021 are prospective in nature and not declaratory stand well settled. The disallowance, accordingly, cannot be sustained. 7. Before parting, it is necessary to refer to the decision of the jurisdictional High Court referred to by the assessee in the specific ground No. 2 raised in the present appeal wherein the decision of the Hon'ble Himachal Pradesh High Court in the case of CIT vs. Nipso Polyfabrika Ltd. [2013] 350 ITR 327 has been relied upon. The said decision, it is seen, specifically deals with the employees' contribution. Their Lordships relying upon decision of the Apex Court in the case of CIT Vs. Alom Extrusions Ltd. (2009) 319 ITR 306 (which was in the context of employers' contribution) referring to the decision of the Hon'ble Delhi High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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