TMI Blog2021 (10) TMI 621X X X X Extracts X X X X X X X X Extracts X X X X ..... these all relate to the order of the Ld. CIT(A) in confirming the disallowance of ₹ 8,37,846/- made by the A.O, CPC passed order under section 143(1)/154 in respect of delayed payment of employees contribution to PF ESI. 3. Facts of the case in brief are that the assessee is a private limited company and is engaged in the business of providing the call centre services, back office processing activities, telemarketing and direct marketing, mailing activities for different clients. The assessee filed its return of income for the A.Y.2018-19 on 11.09.2018 under section 139(1) of the I.T. Act declaring NIL Income. The above return was revised on 13.03.2019 after receiving notice under section 143(1)(a) of I.T. Act for the proposed adjustment of ₹ 45,93,409/- comprising of disallowance of late payments made on account of employees ESI/EPF and payments covered under section 43B of the I.T. Act, 1961. Subsequently, a notice under section 143(1)(a) of I.T. Act was issued on 22.07.2019 for proposed set off of ₹ 8,37,846/- being disallowance of late payments of ESI/EPF with claim of brought forward/carried forward loss claimed in the return. The assessee filed respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as per Finance Act, 2021, Section 9 relates to amendment to Section 36 and Section 11 relates to amendment to Section 43B. Referring to various decisions, he submitted that after considering the various decisions relied on by the Ld. CIT-DR, the Coordinate Benches of the Tribunal are consistently taking the view that employees contribution to PF ESI, if paid before the due date of filing of the income tax return under section 139(1), is an allowable deduction and no disallowance can be made. 1. Order of the ITAT, Hyderabad in the case of Crescent Roadways Pvt. Ltd., vs., DCIT vide ITA.No.1952/ Hyd/2018 dated 01.07.2021. 2. Order of the ITAT, Delhi in the case of DCIT vs., Dee Development Engineers Ltd., vide ITA.No.4959/Del./2016 dated 08.04.2021. 3. Order 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dismissed by the DCIT, CPC and on further appeal, the Ld. CIT(A) dismissed the appeal filed by the assessee. It is the submission of the Learned Counsel for the Assessee that payment for employees contribution towards PF ESI have been made before the due date of filing of the income tax return under section 139(1), therefore, in view of the consistent decisions of the Coordinate Benches of the Tribunal, the same does not call for any disallowance. It is also his submission that after the decision of the Hon ble Delhi High Court in the case of CIT vs., M/s. Bharat Hotels Ltd., (supra), the Hon ble Delhi High Court in the case of PCIT vs., Pro Interactive Service (India) Pvt. Ltd., vide ITA.No.983/2018 order dated 10.09.2018 has held that no 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 PCIT vs., Pro Interactive 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 amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia) Pvt. Ltd. ITA No. 983/2018 pronounced on 10.09.2018 wherein the Hon ble High Court decided the issue in favour of the assessee relying upon the judgment of AIMIL Ltd. (supra). The Hon ble Delhi High Court held that the legislative intent was/is to ensure that the amount paid is allowed as 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. 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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