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TMI Blog2022 (6) TMI 1412X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd Versus ACIT, Circle : 24 (2) New Delhi, Anilesh Enterprises Pvt. Ltd.Versus ACIT, Circle : 2 (2) New Delhi., Parsons Nutritionals Pvt. Ltd Versus ACIT,Circle : 19 (2) New Delhi, Mars Security & Manpower Services Versus Income Tax Officer, Ward : 2 (4) Gurgaon., Virender Kumar Versus Income Tax Officer,Ward : 4 (1) Gurgaon, Prabhanjan Yadav Versus Income Tax Officer, Ward : 4 (1) (5) Aligarh, Shri Bhuwan Sharma Versus Income Tax Officer,Ward : 71 (2) New Delhi, S. S. Saib Constructions Pvt. Ltd Versus ACIT,Circle : 2 (1) Faridabad, Rama Construction Company Versus DCIT,Central Circle : 30 New Delhi, Rama Civil India Construction Pvt. Ltd Versus DCIT, Central Circle : 16 (1), IKEA Services India Pvt. Ltd Versus DCIT,Circle : 10 (1) New Delhi, Kavita Versus Income Tax Officer,Ward : 1 (1), Faridabad, Crystal Crop Protection Ltd Versus DCIT,Circle : 4 (2) / 6 (2) New Delhi, Shri Satya Parkash Versus Income Tax Officer,Ward : 3 (1)(5) Shamli, M/s. Brij Gopal Construction Company Pvt. Ltd Versus ACIT,Special Range : 2, New Delhi, Aspiration Clothing Versus DCIT,Circle : 20 (1), New Delhi , Indaksh Solutions Pvt. Ltd.Versus Income Tax Officer,Ward : 12 (2),New Delhi, Bholeshwar C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onika Agarwal, Advocate; & Shri Lalit Mohan, C. A.; Shri Rajeev Ranjan, C. A.; Shri Brij Mohan Barwal, C. A.; Shri Hemant Jain, Advocate; Shri Baldev Raj, C. A. Shri Rajeev Sabharwal, F.C.A. & Shri Kewal Pawar, C. A. Shri Rakesh Jain, Advocate; Shri Dinesh Kumar Agarwal, C.A.; Shri Pushkar Pandey, Advocate; Shri Manoj Garg, C. A.; Shri P. K. Jain, C. A.; Shri M. S. Lodha, C. A., And Ors. For the Respondent : Shri Abhishek Kumar, Sr. D. R. ORDER PER BENCH : 1. These bunch of 60 appeals are filed by different assessees against the orders of the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to CIT (Appeals) / NFAC) for assessment years 2014-15, 2017-18, 2018-19 and 2019-20 in sustaining the disallowance made under Section 36(1)(va) of the Income Tax Act, 1961 (the Act) in respect of employees' contribution to ESI and PF deposited after the due date under the relevant Acts, but before the due date for filing return of income under Section 139(1) of the Act. 2. In spite of issue of notices in some cases, none appeared on behalf of the assessees nor any adjournments were sought. As the issue in the appeals has been decided in a numb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hon'ble Supreme Court in the case of M.M. Aqua Technologies Ltd. Vs. CIT (supra) held that retrospective provision in a Tax Act which is for the removal of doubts cannot be presumed to be retrospective even where such language is used if it alters or changes the law as it earlier stood. The Hon'ble Supreme Court also observed that this was the position as held by the apex court in the case of Sedco Forex International Drill. Inc Vs. CIT (2005) 12 SCC 717. The Amendments made to Section 36 and Section 43B by insertion of Explanations 2 and 5 respectively. In these Sections it is clarified that for the removal of doubts the provisions of these Sections were amended. Therefore, the ratio of the decision of the Hon'ble Supreme Court in the case of M.M. Aqua Technologies Ltd. Vs. CIT (supra) squarely applies. 6. Further we also observe that recently this Tribunal in a batch of appeals in the cases of Raj Kumar Vs. ITO CPC Bangaluru in ITA. No. 1392/Del/2021 and other appeals by order dated 28.02.2022 considering various decisions rendered by various High Courts and the Tribunals held that the amendment brought in by Finance Act, 20 2021 is effective from 1.04.2021 and no disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r: "2. The case relates to the assessment year 2002-03. The respondent assessee had filed its return on 30-10- 2002 declaring income at Rs. 7,95,430. During the assessment proceedings, the Assessing Officer (A O) found that the assessee had deposited employers' contribution as well as employees' contribution towards provident fund and ESI after the due date, as prescribed under the relevant Act/Rules. Accordingly, he made addition of Rs. 42,58,574 being employees' contribution under section 36(1)(va) of the Act and Rs. 30,68,583 being employers' contribution under section 43B of the Act. Felt aggrieved by this assessment or der, the assessee preferred appeal before the CIT(A) who decided the same vide orders dated 15-7- 2005. Though the C IT(A) accepted the contention of the assessee that if the payment is made before the due date of filing of return, no disallowance could be made in view of the provisions of section 43B, as amended vide Finance Act, 2003, he still confirmed the addition made by the Assessing Officer on the ground that no documentary proof was given to support that payment was in fact made by the assessee. The assessee filed an application under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT v. Vinay Cement Ltd. which was a special l eave petition filed by the department against the High Court Order of 26th June, 2006 in IT A No. 2/05 and ITA No. 56/03 and IT A No. 80/03 of the High Court of Guwahati, Assam and it is order dated 7th March, 2007. A copy of the said order is placed on record. The observations of their Lordships on the issue are as under :- 'In the present case we are concerned with the l aw as it stood prior to the amendment of section 43B. In the circumstances the assessee was entitled to claim the benefit in section 43B for that period particularly in view of the fact that he has contributed to provident fund before filing of the return. The special leave petition is dismissed." 29. Thus, we find that the Co-ordinate bench of ITAT and the H on'ble Jurisdictional high Court of Delhi have relied on the judgment of Vinay Cements Ltd. (supra). 30. Further, the Hon'ble Jurisdictional High Court of Delhi in the case of PCIT V s. Pro Interactive Services (India) Pvt. Ltd. in ITA 983/2018 dated 10.09.2018 while dismissing the appeal of the Revenue held that "the legislative intent was/is to ensure that the amount paid is allowed as an e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "Provision relating to Direct Taxes" with to rationalization of various provisions, the issue of clause (24) of Section 2 sub-clause (x), Section 36(1) clause (va), Section 43B with regard to provisions of sub- Section (1) of Section 139 have been dealt at length. The gist is as under: "Rationalization of various Provisions Payment by employer of employee contribution to a fund on or before due date Clause (24) of section 2 of the Act provides an inclusive definition of the income. Sub-clause (x) to the said clause provide that income to include any sum receiv ed by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees. Section 36 of the Act pertains to the other deductions. Sub-section (1) of the said section provides for various deductions allowed while computing the income under the head Profits and gains of business or profession'. Clause (va) of the said sub-section provides for deduction of any sum received by the assessee from any of his employees to which the provisions of sub-clause 25 (x) of clause (24) of section 2 appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is proposed to - (i) amend clause (va) of sub-section (1) of section 36 of the Act by inserting another explanation to the said clause to clarify that the provision of section 43B does not apply and deemed to never have been applied for the purposes of determining the ―due date under this clause; and (ii) amend section 43B of the Act by inserting Explanation 5 to the said section to clarify that the provisions of the said section do not apply and deemed to never have been applied to a sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section 2 applies. These amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021- 22 and subsequent assessment years." [Clauses 8 and 9] 33. Thus, the matter has been finally decided and the controversy has been put to rest. 34. Having gone through the Order s of the Co-ordinate Bench of Tribunal allowing the delay ed payment pertaining to employees contribution, Orders of the Coordinate Bench of Tribunal disallowing the delayed payment pertaining to employees contribution, Judgments of various Hon'bl e Courts disallowing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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