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2021 (12) TMI 1251 - ITAT DELHIDelayed payment of employees contribution to Provident Fund (PF) and Employees State Insurance (ESI) - Scope amendment made to section 36(1)(va) by Finance Act 2021 w.e.f. 1.4.2021 and the corresponding amendment made to section 43B by inserting Explanation 5 - HELD THAT:- As per the settled legal principle, delayed payment of contribution to PF and ESI including employee’s contribution, is allowable as deduction under section 43B r.w.s 36(1)(va) of the Act if it is paid before the due date of return of income prescribed under section 139 (1) of the Act. Undisputedly, in the facts of the present appeal the employees’ contribution to PF and ESI were paid before the due date of return of income prescribed under section 139(1) of the Act. However, assessee’s claim has been disallowed by applying the amended provisions of section 36(1)(va) and 43B of the Act. Though, the amendment to the aforesaid provisions restricting the applicability of section 43B to employee’s contribution to PF and ESI as well as explaining the due date of payment of the aforesaid dues have been brought into the statute by Finance Act 2021 w.e.f. 1.4.2021, however, Commissioner (Appeals) has applied them to the impugned assessment year by stating that the amendments will have retrospective operation as they are clarificatory in nature. However, as find this issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench in case of Mr. Vansh Jain vs DCIT [2021 (10) TMI 620 - ITAT DELHI] wherein as held that the amended provisions would apply prospectively w.e.f. assessment year 2021-2022. Thus as assessee’s claim of deduction has to be allowed. - Decided in favour of assessee.
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