TMI Blog2021 (10) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... the I.T. Act. Therefore, the amendment 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. As the amendment by Finance Act, 2021 to Sec. 36(1)(va) and 43B of the I.T. Act will not have application to relevant assessment year, namely A.Y. 2017-2018. Accordingly, I 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h. CIT v. Hemla Embroidery Mills (P) Ltd. (2013) 37 taxmann.com 160 (P H) where it was held that even though the payment to specified fund was made after the due date under the said acts the payment to specified funds is allowable expenditure if they are paid within the due date specified u/s. 139(1). 3. In the order of the learned CIT(A) it is mentioned that notices for hearing have been issued from time to time and the last notice was issued on 11.06.2021 (with due date for submitting the reply being 17.06.2021) which has not been replied to. The learned CIT(A) has failed to recognize the fact that the new Income tax portal where the online submission are to be made was not operational during the period and until the date on wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment, it was noticed that employees' contribution to PF to the tune of ₹ 3,46,929 and employees' contribution to ESI to the tune of ₹ 47,126 have been remitted to the concerned funds beyond the stipulate due date. The A.O. by placing reliance on the CBDT Circular No. 22/2015 dated 17.12.2015, held that the employees' contribution remitted to the concerned fund beyond the stipulated due date cannot be allowed as a deduction. Accordingly, assessment u/s. 143(3) of the I.T. Act was completed vide order dated 12.12.2019. 4. Aggrieved, the assessee preferred an appeal to the first appellate authority. Before the first appellate authority, it was contended that the assessee had remitted the employees' contribution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Standing Counsel by relying on the order of the Delhi Bench of the Tribunal in the case of Vedvan Consultants Pvt. Ltd. v. ACIT in ITA No. 1312/Del/2020 (order dated 26.08.2021) submitted that the above order of the Tribunal had held that the amendment brought about to section 36(1)(va) and 43B of the I.T. Act is clarificatory and hence retrospective. 7. I have heard rival submissions and perused the material on record. Admittedly, the assessee has remitted the employees' contribution to PF and ESI before the due date for filing of return u/s. 139(1) of the I.T. Act. The Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT reported in 366 ITR 408 (Kar.) has categorically held that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing orders of the Tribunal had categorically held that the amendment to section 36(1)(va) and 43B of the I.T. Act by Finance Act, 2021 is only prospective in nature and not retrospective. (i) Dhabriya Polywood Limited v. ACIT reported in (2021) 63 CCH 0030 Jaipur Trib. (ii) NCC Limited v. ACIT reported in (2021) 63 CCH 0060 Hyd Tribunal. (iii) Indian Geotechnical Services v. ACIT in ITA No. 622/Del/2018 (order dated 27.08.2021). (iv) M/s. Jana Urban Services for Transformation Private Limited v. DCIT in ITA No. 307/Bang/2021 (order dated 11th October, 2021) 7.3. In view of the aforesaid reasoning and the judicial pronouncements cited supra, the amendment by Finance Act, 2021 to Sec. 36(1)(va) and 43B of the I.T. Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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