Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 843 - AT - Income TaxDisallowance u/s. 36(i)(va) - employees contribution to PF belatedly - contribution paid beyond the due date prescribed under the ESI Act but before the due date prescribed u/s. 139(1) - Scope of amendment of section 43B - HELD THAT:- Whether the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 is clarificatory and declaratory in nature. The Hon’ble Supreme Court in the recent judgment in the case of M.M.Aqua Technologies Limited v. CIT [2021 (8) TMI 520 - SUPREME COURT] had held that retrospective provision in a taxing Act which is “for the removal of doubts” cannot be presumed to be retrospective, if it alters or changes the law as it earlier stood (page 597). In this case, in view of the judgment of the Hon’ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. [2014 (3) TMI 386 - KARNATAKA HIGH COURT] the assessee would have been entitled to deduction of employees’ contribution of PF and ESI if the payment was made prior to due date of filing of the return of income u/s 139(1) - the amendment brought about by the Finance Act, 2021 to section 36(1)(va) and 43B of the I.T.Act, alters the position of law adversely to the assessee. Therefore, such amendment cannot be held to be retrospective in nature. Even otherwise, the amendment has been mentioned to be effective from 01.04.2021 and will apply for and from assessment year 2021-2022 onwards. The amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 will not have application for the relevant assessment year, namely A.Y. 2019-2020. Accordingly, we direct the A.O. to grant deduction in respect of employees’ contribution to PF and ESI since the assessee has made payment before the due date of filing of the return of income u/s 139(1). - Decided in favour of assessee.
|