TMI Blog2022 (9) TMI 923X X X X Extracts X X X X X X X X Extracts X X X X ..... LHI HIGH COURT ] We, thus, in terms of our aforesaid observations set-aside the order of the CIT(Appeals) and direct the AO to vacate the disallowance made by him u/s.36(1)(va) of the Act qua the delayed deposit of the employees share of contribution of EPF/ESIC. Assessee appeal allowed. - ITA No.150/RPR/2022 - - - Dated:- 5-9-2022 - Shri Ravish Sood, Judicial Member For the Assessee : Shri Nikhilesh Begani, CA For the Revenue : Shri Gitesh Kumar, Sr. DR ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 17.06.2022 which in turn arises from the orders passed by the A.O under Sec. 154 of the Income-tax Act, 1961 (in short the Act ) dated 30.01.2020 for the assessment year 2018-19. Before us the assessee has assailed the impugned order on the following grounds of appeal: 1. GROUND NO.I. That the Appellate Order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ( the Ld. CIT(A) under section 250 of the Income Tax Act, 1961 ( the Act ) is highly unjustified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance of Rs.91,150/- may please be deleted. GROUND NO. III 4. In any case and without prejudice to the above, the Ld. CIT(A) has grossly erred in confirming the action of the Ld. CPC in making the disallowance under the provisions of section 36(1)(va) of the Act. He has failed to appreciate that the adjustment made was beyond the purview of the adjustments specified under section 143(1)(a) of the Act and further, the impugned issue being highly debatable, contentious, in respect of which conceivably two views/opinions are possible accordingly, beyond the scope of prima facie adjustments as per section 143(1)(a) hence, the addition/disallowance of Rs.91,150/- is highly unjustified, palpably illegal, bad in law, unsustainable and not in accordance with the provisions of law. Hence, it is earnestly prayed that the addition/disallowance of Rs.91,150/- may please be deleted. 5. GROUND NO. IV That the Appellant craves leave to add, amend, alter or delete all or any of the grounds of appeal at the time of hearing of the appeal. 2. Shorn of unnecessary details, the return of income filed by the assessee for the assessment year 2018-19 was processed by the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.227/2022 dated 27.07.2022. 8. Per contra, the Ld. Departmental Representative (for short DR ) relied on the orders of the authorities below. It was vehemently submitted by the Ld. DR that pursuant to insertion of Explanation-5 to Section 43B a/w. Explanation-1 to Section 36(1)(va) of the Act, the legislature had made it abundantly clear beyond any doubt that the delayed deposit of the employee s share of contribution towards welfare funds by the assessee would not be saved by the extended time period contemplated u/s.43B(b) of the Act. 9. After giving a thoughtful consideration to the issue in hand in the backdrop of the contentions advanced by the ld. Authorized Representatives of both the parties, we find that the issue herein involved is squarely covered by the order passed by the Tribunal in the case of M/s Ind Synergy Limited Vs. The DCIT-1(2), Raipur, ITA No.312/RPR/2016; dated 10/03/2022 (to which one of us, the JM was a party), wherein after exhaustive deliberations it was held as under : Adverting to the disallowance of the assessee s claim for deduction of the employees share of contribution towards PF of Rs.2,88,976/-, we find that the same had bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 307 (Raj) vii. Essae Teraoka Pvt. Ltd Vs. DCIT (2014)366 ITR 408 (Kar) viii. CIT Vs. Vijay Shree Ltd (2014) 43 Taxmann.com 396 (Cal) ix. CIT Vs. Kichha Sugar Co Ltd (2013) 356 ITR 351 (Uttarakhand) In the backdrop of the aforesaid settled position of law, we are of the considered view that no distinction is to be drawn between the employers as well as employees contribution to PF and ESI, as both are covered u/s 43B of the Act. 11. Before parting qua the aforesaid issue in hand, we think it apt to deal with the scope of applicability of the amendments that have been made available on the statue vide the Finance Act, 2021, i.e, Explanation 5 to Section 43B and Explanation 2 to Section 36(1)(va), i.e, as to whether those are applicable prospectively w.e.f A.Y 2021-22 onwards, or, are to be given a retrospective effect. Issue in hand is squarely covered by the order of a coordinate bench of the tribunal, i.e, ITAT, Amritsar in the case of Vinko Auto Industries Ltd. Vs. DCIT 2021 (12) TMI 636. In its aforesaid order, the Tribunal had after drawing support from the order of the ITAT, Hyderabad Bench in the case of the Value Momentum Software Services Pvt Ltd. Vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in Section 36(1)(va) and 43B of the Act by Finance Act 2021 has to be considered as clarificatory in nature and having retrospective effects, therefore would be applicable to the previous assessment years as well. We may observe that various benches of the ITAT including Hyderabad Bench in the case of Value Momentum Software Services Pvt. Ltd. (ITA No.2197/Hyd/2017 decided on 19.05.2021), have taken into consideration the identical issue qua applicability of the amendment to Section 36(1)(va) and Section 43B of the Act, by inserting Explanations by the Finance Act, 2021 and clearly held that the amendment shall be applicable from 1st April, 2021 onwards . It is also relevant to note that the CBDT has also issued Memorandum of Explanation qua applicability of the amended provisions of Section 36(1)(va) 43B of the Act w.e.f. 1st April, 2021, and Assessment Year 2021-21 onwards, hence there is no doubt qua applicability of the amended provisions referred above, prospectively. On the aforesaid discussion, the second aspect as considered/determined by the ld. CIT(A) qua retrospective application of the amended provisions of Section 36(1)(va) and 43B of the Act wherein Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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