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2021 (10) TMI 1280 - AT - Income TaxDelayed payments of employees contribution to ESI and PF by invoking the provisions of section 36(1)(v) - Revenue has disallowed the same in the impugned year by applying the amendment made by Finance Act 2021 to section 36(1)(va) and 43B allowing the claim of such deduction only when paid by due dates specified in their respective Acts, holding the amendment to be applicable on all pending cases post the amendment - HELD THAT:- As 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. Therefore the addition, we hold, cannot be made on the strength of the amendment effected by Finance Act 2021 to section 36(1)(va)/43B of the Act. Moreover it is an admitted position that the jurisdictional High Court has in various decisions held that employees contribution to ESI & PF is allowable if paid by the due date of filing return of income u/s 139(1) of the Act. See M/S NUCHEM LTD. [2010 (2) TMI 959 - PUNJAB AND HARYANA HIGH COURT] and M/S HEMLA EMBROIDERY MILLS (P) LTD. [2013 (2) TMI 41 - PUNJAB AND HARYANA HIGH COURT] We hold that the claim of employees contribution to ESI and PF as per section 36 (1) (va) of the Act cannot be denied in the impugned year, i. e. 2019 - 20 on the basis of amendment made to the section by Finance Act 2021. The order of the Ld. CIT(A) upholding the said disallowance to the tune of ₹ 6,87,309 /- is therefore set aside and the AO is directed to allow the claim of the assessee.
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