TMI Blog2022 (5) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... that such a direction does not have any statutory support. Section 251(1)(a) clearly circumscribes the powers of the Commissioner Appeals. It specifically lays down unambiguously that in an appeal against an order of assessment, the Commissioner Appeals may confirm, reduce, enhance or annul the assessment. It is not in dispute that the power to set aside the issue back to the Assessing Officer is no longer vested with the said authority. According, we set aside the finding. On a consideration of the facts on record and in the light of the submissions of the parties before the Bench. we substitute the said direction with our direction and deem it appropriate to direct the Assessing Officer to verify the facts and allow necessary relief in accordance with law set out herein above. - ITA No. 5/CHD/2022 - - - Dated:- 28-4-2022 - SMT. DIVA SINGH , JUDICIAL MEMBER And SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER Assessee by : Shri Parikshit Aggarwal , CA Revenue by : Dr. Ranjeet Kaur , Sr. DR ORDER Per Diva Singh 1. The present appeal has been filed by the assessee assailing the correctness of the order dated 07.12.2021 of CIT(A) (NFAC i.e. National Faceless ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted that the said grounds may be allowed. 3. Addressing ground No. 4 it was his submission that the issue has been restored back by the CIT(A) requiring the Assessing Officer to verify the employees contribution. It was his submission that the power to set aside the issue of the AO is no longer vested with the CIT(A). However, he would have no objection if the said direction is substituted by the ITAT directing the AO to verify the facts. 4. Addressing ground No. 5 it was his submission that similar direction for remand back for verification has been given by the CIT(A). The direction it was submitted is contrary to the statutory provisions. Similar prayer as in ground No. 4 was repeated. 5. The ld. Sr. DR relied upon the impugned order. 6. We have heard the submissions of both the parties and perused the material available on record. It is seen that the legal issue arising in ground Nos. 2 and 3 pertains to the late deposit of ESI/PF in terms of the time lines as set out by the relevant statute. It is a matter of fact that when the deposits are made before the filing of the return of income i.e. well within the time of filing the return u/s. 139(1) as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard the rival submissions and perused the material available on record. It is an admitted fact that there was a delay in the payment of EPF relatable to the employees' contribution as far as the time limit set out by the specific Act is concerned. It is also an admitted fact that the return was filed by the assessee within the due date as per the time limit as set out u/s. 139(1) of the Income Tax Act. Hence, the amount of the employees' contribution of the EPF amounting to Rs. 5,24,104/- stood paid before the filing of the return. It is seen that the disallowance made was sustained by Addl. Commissioner on account of the fact that the Amendments carried out by Finance Act 2021 in Sections 36(1)(va) and Sec. 43B were considered to be clarificatory, hence retrospective in nature. The said view has consistently been held to be incorrect by various orders of the ITAT as on a bare consideration of the Notes on Clauses appended to the Finance Bill it was clarified that the Amendment will take effect from the First April 2021. Thus, the legal position thereon is well settled. The Co-ordinate Benches have consistently right from order dated 03.08.2021 of the Delhi Benches in In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties and perused all the relevant material available on record. As regards Ground No. 1, the assessee company has not deposited the employees' contribution within the due date which is prescribed under the said statute i.e. Provident Fund and ESIC. This issue is dealt by the Hon'ble Delhi High Court in case of CIT vs. M/s. Bharat Hotels Ltd. 410 ITR 417 wherein the issue is decided in favour of the revenue, without considering the decision of the Hon'ble Delhi High Court in case of CIT vs. AIMIL Ltd. (2010)321 ITR 508 (Del.). But the Ld. AR relied upon the decision of the Hon'ble Delhi High Court In case of Pr, CU vs. Pro Interactive Service (India) Pvt. Ltd. ITA No. 983/2018 pronounced on 10.09.2018 wherein the Hon'ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon'ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as dee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n view of this we allow the solitary ground of appeal raised by the assessee holding that the addition/disallowance made by the learned assessing officer of late deposit of employees contribution to the provident fund and ESI, as it is deposited before the due date of the filing of the return of an income but beyond the due date prescribed Under the respective provident fund and ESI laws is not sustainable in law. 9. In the result, appeal of the assessee is allowed. 5. We further find that the Chandigarh Benches also consistently following the decisions of the jurisdictional High Court in the case of CIT Vs Nuchem Ltd. (ITA No. 323 of 2009) and CIT Vs Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167 have allowed similar claims of the assessee taking note of the fact the various Co-ordinate Benches have consistently held that the amendment to section 36(1)(va) and u/s. 43B of the Act effected by the Finance Act 2021 is applicable prospectively reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, specifically stating the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Accordingly, considering the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndments effected by the Finance Act 2021 to section 36(1)(va) and u/s. 43B of the income Tax Act are not clarificatory in nature and they do not have retrospective effect and are applicable prospectively. Reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, it has been held that the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Accordingly, considering 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. Hence, the addition is directed to be deleted as the amount stood deposited by the due date as held in Section 139(1) of the Act. Hence, within time. The appeal of the assessee is allowed. Said order was pronounced in the presence of the parties via Webex. (emphasis supplied) 6. Accordingly, on account of the aforementioned reasoning, we hold that the disallowance of Rs. 5,24,104/- sustained in the present appeal by the CIT(A) qua the employees' contribution despite late paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed. Said order was pronounced in the presence of the parties via Webex. 6.1. Accordingly, we told that on the legal issue the relief is allowable on ground Nos. 3 and 4 hence is in assessee's favour. 7. It is seen that the facts relatable to ground No. 4 are found discussed in page 26 and 27 of the impugned. On a perusal of the same it is seen that the issue has been remanded back to the Assessing Officer by the Ld. CIT(A) for verification on facts. We find that such a direction does not have any statutory support. Section 251(1)(a) clearly circumscribes the powers of the Commissioner Appeals. It specifically lays down unambiguously that in an appeal against an order of assessment, the Commissioner Appeals may confirm, reduce, enhance or annul the assessment. It is not in dispute that the power to set aside the issue back to the Assessing Officer is no longer vested with the said authority. According, we set aside the finding. On a consideration of the facts on record and in the light of the submissions of the parties before the Bench. we substitute the said direction with our direction and deem it appropriate to direct the Assessing Officer to verify the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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