TMI Blog2021 (10) TMI 843X X X X Extracts X X X X X X X X Extracts X X X X ..... ment brought about by the Finance Act, 2021 to section 36(1)(va) and 43B of the I.T.Act, alters the position of law adversely to the assessee. Therefore, such amendment cannot be held to be retrospective in nature. Even otherwise, the amendment has been mentioned to be effective from 01.04.2021 and will apply for and from assessment year 2021-2022 onwards. The amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 will not have application for the relevant assessment year, namely A.Y. 2019-2020. Accordingly, we direct the A.O. to grant deduction in respect of employees contribution to PF and ESI since the assessee has made payment before the due date of filing of the return of income u/s 139(1). - Decided in favour of assessee. - ITA No.388/Bang/2021 - - - Dated:- 11-10-2021 - SHRI GEORGE GEORGE K, JUDICIAL MEMBER For the Appellant : Sri.Narendra Sharma, Advocate For the Respondent : Sri.Ganesh R.Ghale, Standing Counsel ORDER This appeal at the instance of the assessee is directed against CIT(A) s order dated 31.07.2021. The relevant assessment year is 2019-2020. 2. The grounds raised read as follows:- 1. The orders of the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right to seek waiver with the Hon'ble CCIT /DG, the appellant denies itself liable to be charged to interest u/s. 234B and 234C of the Act, as computed in the intimation u/s.143[1] of the Act, under the facts and in the circumstances of the appellant's case. 6. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 3. The brief facts of the case are as follows: The assessee is a firm. For the assessment year 2019- 2020, the return of income was filed on 07.10.2019 declaring income of ₹ 64,092. Intimation u/s 143(1) of the I.T.Act was issued on 29.06.2020, wherein the total income was assessed at ₹ 1,86,337. The difference between the returned income and the assessed income was on account of disallowance of a sum of ₹ 1,22,245 being remittance of employees contribution of provident fund of ₹ 1.06,190 and ESI of ₹ 16,055. The disallowance was made u/s 36(1)(va) of the I.T.Act for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for which the provision of section 2(24)(x) applies in the list of deductions us 43B. These clarificatory amendments are to clear a meaning of a provision of the Principle Act; which was already implicit. Such clarificatory amendments are retrospective in nature as held in the following decisions. 1. National Housing Bankv. Addl.CIT ITA No.3704/Del/2010 2. CIT v. Poddar Cement Pvt. Ltd. (1997) 5 SCC 482 Therefore after considering the submission of the appellant, relevant judicial decision and the amendment to the Income Tax Act, 1961 by the Finance Act 2021, the disallowance amounting to ₹ 122245/- related to employees contribution to EPF ₹ 16055/- related to ESI paid after due date is confirmed. These grounds of appeal fail and are not allowed. 5. Aggrieved, the assessee has filed this appeal before the Tribunal. The learned AR submitted that the issue whether the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 is clarificatory or not is now settled by the following orders of the Tribunal:- (i) Dhabriya Polywood Limited v. ACIT reported in (2021) 63 CCH 0030 Jaipur Trib. (ii) NCC Limited v. ACIT reported in (2021) 63 C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under sub-section (1) of Section 139 of the IT Act is made, the employer is entitled for deduction. 21. The submission of Mr.Aravind, learned counsel for the revenue that if the employer fails to deduct the employees contribution on or before the due date, contemplated under the provisions of the PF Act and the PF Scheme, that would have to be treated as income within the meaning of Section 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. WE agree with the view taken by this Court in W.A.No.4077/2013. 23. In the result, the appeal is allowed and the substantial question of law framed by us is answered in favour of the appellant-assessee and against the respondent-revenue. There shall be no order as to costs. 7.2 The further question is whether the amendment to section 36(1)(va) and 43B of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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