TMI Blog2021 (10) TMI 678X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) so made by the CPC towards the deposit of the employees s contribution towards ESI and PF though paid before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted. - Decided in favour of assessee. - ITA No. 81/JP/2021 - - - Dated:- 12-10-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Neeraj Rathore (CA) For the Revenue : Shri B.K. Gupta (PCIT) ORDER PER: SANDEEP GOSAIN, J.M. The present appeal has been filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi dated 23/07/2021 for the A.Y. 2018-19. Following grounds have been taken by the assessee: 1. That the ld. CIT(A) NFAC erred in disallowing the PF and ESI payments amounting to ₹ 97,290/- deposited before the due date of filing of the return during the year. 2. That the order passed by the ld. AO is bad in law as well as on facts. 3. That the petitioner craves to add, alter or amend any or all of the grounds of appeal on or before the due date. 2. The hearing of the appeal was concluded through video conference in view of the prevailing situatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he return of income filed by the assessee, the variance between the tax audit report and ITR has been duly flagged by the CPC in the computerized processing and disallowance U/s 143(1)(a)(iv) on the basis of fact furnished by the assessee was made which clearly fails within ambit of prima facie adjustment to be carried out U/s 143(1)(a)(iv) of the Act. Further, reliance was placed on the amendment brought in by the Finance Act, 2021 wherein the explanation to Section 36(1)(va) has been introduced. It was submitted from the said amendment, it is evident that the law is and has always very clear i.e. employee s contribution to specified fund will not be allowed as deduction U/s 36(1)(va) if there is delay in deposit even by a single day as per the due dates mentioned in the respective legislation. It is also clear that the amendments are only declaratory/clarificatory in nature and are therefore, applicable with retrospective effect by necessary intendment of deeming nature expressly stated therein. The ld. DR accordingly submitted that in view of the unambiguous wording of the now amended provisions of Section 36(1) and 43B, it is clear that the employee s contribution can be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Sec.43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in the case of Allied Motors (P) Ltd. (supra). 21. A conjoint reading of the proviso to Section 43-B which was inserted by the Finance Act, 1987 made effective from 01/04/1988, the words numbered as clause (a), (c), (d), (e) and (f), are omitted from the above proviso and, further more second proviso was removed by Finance Act, 2003 therefore, the dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act. 19. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon ble Rajasthan High Court and various other High Courts including Hon ble Delhi High Court in case of CIT vs AIMIL Ltd 321 ITR 508 which were brought to his notice by the ld AR during the course of appellate proceedings but has decided to follow the decision of the Hon ble Gujarat High Court in case of State Road Transport Corporation (supra). Given the divergent view taken by the Hon ble Gujarat High Court as against consistent view of other High Courts including the Hon ble Rajasthan High Court and the fact that the jurisdiction over the Assessing officer in the instant case lies with the Hon ble Rajasthan High Court, in our considered view, the ld CIT(A) ought to have considered and followed the decision of the jurisdictional Rajasthan High Court, as evident from series of decisions referred supra, in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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