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2022 (6) TMI 1305 - AT - Income TaxLate deposit of the Employees’ share of EPF and ESI - disallowance in the intimation u/s.143(1) on the ground that the assessee late deposited the employees’ share of EPF and ESI etc. - difference between employees or employer’s contribution - Scope of amendment - HELD THAT:- This issue is no more res integra in view of several judgments allowing deduction u/s 36(1)(va) of employees’ share of contribution deposited after due date under the respective Acts but before the date prescribed u/s 139 - As in CIT vs. Nipso Polyfabriks Ltd. [2012 (11) TMI 592 - HIMACHAL PRADESH HIGH COURT] has held that there exists no difference between employees or employer’s contribution and both are to be allowed as deduction if deposited before the due date. Finance Act, 2021 has inserted Explanation 2 below section 36(1)(va) providing that the provisions of section 43B shall not apply for the purpose of determining the due date under this clause w.e.f. 01.04.2021. The effect of this amendment is that if the amount of employees’ contribution towards EPF, ESI, etc is delayed by an employer beyond the due date under the respective Acts, the disallowance will be called for notwithstanding the fact that it was deposited before the due date u/s 139 of the Act. Since the assessment year under consideration is 2019-20, which is anterior to the amendment carried out with effect from A.Y. 2021-22, we hold that the position of law as set out in CIT vs. Nipso Polyfabriks Ltd. (supra) squarely applies to the facts and circumstances of the instant case, thereby not warranting any disallowance since the amount in question was admittedly deposited before due date u/s 139(1) of the Act. The addition is therefore, directed to be deleted. - Decided in favour of assessee.
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