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TMI Blog2024 (10) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... as per section 139(1) - ITAT held that the impugned adjustment made on payment under NPS was not justified and amount in question was to be treated as allowable under Section 43B(b). It would also be useful to reproduce the Notification dated 31.03.2021 issued by the Department of Pension and Pensioners Welfare which specifies that the National Pension System Rules, 2021 shall apply only to Government servant and not to public at large. In view of the above notification, we note applies specifically to Government Servants including Civilian Government Servant in Defence Services. Appeal of the assessee is allowed. - Smt. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Dhrunal Bhatt, A.R. For the Respondent : Shri Rignesh Das, Sr. DR ORDER PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER: This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short Ld. CIT(A) ), ADDL/JCIT (A)-4, Hyderabad vide order dated 30.01.2024 passed for A.Y. 2019-20. 2. The Assessee has taken the following grounds of appeal:- 1. In law and on the facts and in the circumstances of the case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovident Funds (PF) and Employees' State Insurance (ESI). Ld. CIT(Appeals) observed that the amount of Rs. 3,34,28,177/- represented late payments of employee contributions to the NPS. Ld. CIT(Appeals) observed that the core issue revolves around the addition of Rs. 3,34,28,177/- as unpaid employee contributions to the National Pension Scheme, with the assessment made under Section 43B of the Income Tax Act. The assessee contended that this amount was deposited belatedly but prior to the filing of the income tax return as per Section 139(1), thereby asserting that it should be allowed as a deduction according to the law. It was submitted by the assessee that legal precedents indicate that contributions such as those for Provident Funds (PF) and Employees' State Insurance (ESI), even if paid late, can still be claimed as deductions under Section 43B, provided the payments are made before the return filing deadline. This stems from the interpretation that these contributions fall under the purview of Section 43B(b) of the Act. However, a contradictory trend in various court rulings suggests that Section 43B predominantly applies to employer contributions, thereby leading to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RDA Act, 2013 does not specify a due date for contributions to NPS accounts. To clarify the context, the Counsel for the assessee provided an overview of the NPS, explaining it as a pension and investment initiative by the Government of India designed to offer old-age security to citizens. It was submitted that the NPS is a regulated scheme that allows individuals, including those in the public, private, and unorganized sectors, to contribute regularly toward their pension. This program aims to create a corpus for retirement, with portions of the corpus available for withdrawal at retirement and the remaining amount disbursed as a monthly pension thereafter. The NPS has evolved to become accessible to all Indian citizens, fostering a culture of saving for retirement, and it offers tax benefits under Sections 80C and 80CCD of the Income Tax Act. The Counsel for the assessee submitted before us that contributions to the NPS can occur in two ways: individuals may contribute directly, availing deductions under sections 80CCD(1) and 80CCD(1B), or through their employer, which allows for deductions under section 80CCD(2). In the assessee's scenario, employees contribute through the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount was added to income of assessee and tax demanded thereon. The ITAT noted that there was no due date prescribed in respective PFRDA Act, 2013 as to when payment was required to be made to NPS account. Further, all payments were duly made before filing of return of income as per section 139(1) of the Act. The ITAT held that the impugned adjustment made on payment under NPS was not justified and amount in question was to be treated as allowable under Section 43B(b) of the Act. While passing the order, the ITAT made the following observations: 7. We have given our thoughtful consideration and perused the materials available on record. It is seen from the Return of Income, the assessee made deposit of Rs. 8,19,544/- being Employees contribution under any other welfare fund namely National Pension System (NPS). On perusal of the Tax audit report, it is seen that the contribution is made under NPS before due date of filing Return of Income. NPS is regulated by Pension Fund Regulatory and Development Authority and PFRDA Act, 2013. There is no due date prescribed by the PFRDA as to when the payment is required to be made to the NPS account. Further section 12[3][iii] of the PFRDA Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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