TMI Blog2021 (10) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) TMI 502 - GUJARAT HIGH COURT] , the employees contribution paid by the assessee before the due date of filing of return of income u/s.139(1) is an allowable deduction. Accordingly, we decide this issue in favour of the assessee. - ITA No.604 And 605/Del/2021 - - - Dated:- 30-9-2021 - Sh. N. K. Billaiya, Accountant Member For the Appellant : Sh. Somil Agarwal, Advocate For the Respondent : Sh. Vipul Kashyap, Sr. DR ORDER PER N. K. BILLAIYA, AM: 1. ITA No.604/Del/2021 and 605/Del/2021 are two separate appeals by the assessee preferred against two separate orders of the National Faceless Appeal Centre (NFAC) dated 09.04.2021 pertaining to A.Y.2018-19. 2. ITA No.604/Del/2021 is the appeal against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 26.10.2018 and for the year under consideration the extended due date for filing original return was 31.10.2018. This means that the PF and the ESI were not only deposited within the financial year itself but also before filing of the return. I find that this Tribunal in the case of Azamgarh Steel and Power Private Limited (supra) have considered the decision of the Hon ble Gujarat High Court relied upon by the CIT(A) and held as under :- 6. We have heard the rival submissions and perused the materials available on record. The issue in the present ground is with respect to disallowance of delayed deposit of contribution received by the employees towards provident funds and ESI fund. It is an undisputed fact that there has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee s Provident Fund (EPD) and Employee s State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act. It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd. 82 ITR 192 by the Hon ble Supreme Court. Hence, in light of the latest decision in case of Pro Interactive Service (India) Pvt. Ltd., the issue is covered in favour of the assessee. Hence, Ground No. 1 is dismissed. 10. I further find that this Tribunal in the case of Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 43B in respect of belated payment of employee s contribution. We further noted that the memorandum of Finance Bill, 2021 whereby this amendment was proposed and the relevant clause to the said memorandum clearly intended the amendment shall take effect from 1st April, 2021 and will accordingly apply to the Assessment Year 2021-22 and subsequent year. Clause 8 and 9 of the said memorandum is relevant which are reproduced hereunder: Rationalisation of various Provisions Payment by employer of employee contribution to a fund on or before due date Clause (24) of section 2 of the Act provides an inclusive definition of the income. Sub-clause (x) to the said clause provide that income to include any sum received by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly paid by the assessee on or before the due date for furnishing the return of the income under sub-section (1) of section 139, assessee would be entitled to deduction under section 43B and such deduction would be admissible for the accounting year. This provision does not cover employee contribution referred to in clause (va) of sub-section (1) of section 36 of the Act. Though section 43B of the Act covers only employer s contribution and does not cover employee contribution, some courts have applied the provision of section 43B on employee contribution as well. There is a distinction between contribution and employee s contribution towards welfare fund. It may be noted that employee s contribution towards welfare funds is a mechanism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2021-22 and subsequent assessment years. [Clauses 8 and 9] 14. Therefore, the amended provisions of Section 43B as well as 36(1)(va) are not applicable for the assessment year under consideration. By following the binding decision of Hon ble Jurisdictional High Court, the employees contribution paid by the assessee before the due date of filing of return of income u/s.139(1) is an allowable deduction. Accordingly, we decide this issue in favour of the assessee and the disallowance made by the Assessing Officer is deleted. 15. In the result, the appeal of the Assessee is partly allowed. 11. Respectfully following the decision of this Tribunal (surpa), I direct the NFAC to delete the disallowance of ₹ 1441627/-. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
