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TMI Blog2021 (10) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... income at Rs. 23,44,250/-, wherein adjustment for a sum of Rs. 3,26,330/- was made on account of delayed payment of employees' contribution to PF & ESI. The assessee filed rectification application under section 154 stating that contribution to the PF & ESI has already been paid into the relevant fund account well before the due date specified for furnishing of return of income under sub-section (1) of section 139 of the I.T. Act, 1961, and, therefore, no adjustment is required to be made under section 36(l)(va) read with section 43B of the I.T. Act, 1961. Further as per the tax audit report, there is no adverse comment or opinion of the Auditors and, therefore, the CPC has wrongly invoked the provisions of section 143(1)(a)(iv) of the I.T. Act, 1961. It is a mistake apparent from the record, therefore, the same should be rectified. But the DCIT, CPC rejected the claim of assessee and dismissed the 154 rectification application. 3.1. Aggrieved by order of the DCIT, CPC, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A) it was submitted that assessee has deposited the employees' contribution to PF & ESI amounting to Rs. 3,26,329/- before the due date of fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ITAT, Delhi in the case of DCIT vs., Planman HR (P) Ltd., vide ITA.No.5152/ Del./2017 dated 15.07.2021. 4. Order of the ITAT, Chennai in the case of DCIT vs., Talenpro India HR Pvt. Ltd., vide ITA.No.265/ Chennai/2019 dated 09.04.2021. 5. Order of the ITAT, Agra in the case of Mahadev Cold Storage vs., Jurisdiction Assessing Officer vide I.T.A. Nos. 20 & 21/Agra/2021 dated 14.06.2021. 6. Order of the ITAT, Chennai in the case of DCIT vs., Repco Home Finance Pvt. Ltd., reported in [2020] 183 ITD 782 ITAT-Chennai. 6. The Ld. D.R. on the other hand strongly supported the order of the Ld. CIT(A) and submitted that since the assessee has not made the deposits on account of employees' contribution to PF & ESI before the specified dates as mentioned in the Statute, therefore, the Ld. CIT(A) was fully justified in sustaining the addition made by the CPC. He submitted that there are various decisions in favour of the Revenue where the Honourable High Courts have held that the Amendment by Finance Act, 2015 in Section 43B is restricted only in respect of employers contribution to PF & ESI and if the same is paid on or before the due date of filing of the income tax return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowance is called for where the assessee had paid the employees' contribution to PF & ESI before the due date of furnishing of return of income under section 139(1) of the I.T. Act, 1961. 7.1. I find the Hon'ble Delhi High Court in the case of Pro Interaction Service (India) Pvt. Ltd., (supra), following the decision in the case of CIT vs., AIMIL Ltd., (supra), has held that legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. It was further held that it was not the legislative intent and objective to treat belated payment of Employees' Provident Fund & Employees' State Insurance Scheme as deemed income of the employer under section 2(24)(x) of the I.T. Act, 1961. 7.2. I find the Coordinate Bench of the Tribunal in the case of Insta Exhibitions Pvt. Ltd., New Delhi vs., Addl. CIT, Special Range-4, New Delhi vide ITA.No.6941/Del./2017 order dated 03.08.2021 while allowing such belated deposit of employees' contribution to PF & ESI as per the respective Act, but, paid before the due date of filing of the income tax return, deleted such disallowance by observing as under : "8. We have carefully considered conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." 7. Further with respect to the argument of the learned departmental representative that amendment made with finance act 2021 wherein explanation 1 is added u/s 36 (1) (va) of the act with effect from 1 April 2021, is applicable to the present case, we referred to the "Notes on clauses" at the time of introduction of the finance bill 2021 which says as Under:- "Clause 8 of the Bill seeks to amend section 36 of the Income tax Act, relating to other deductions. Sub-section (1) of the said section provides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deduction for any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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