TMI Blog2021 (12) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... section 139(1) of the Act, then the assessee would be entitled to claim deduction.Therefore, the issue is covered by the decision of the Hon ble Karnataka High Court. T Whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also? - We find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee that Employee s share of PF contribution has been paid before the due date for filing of return u/s.139(1) of the Act and (this fact is not in dispute) hence has to be considered allowable on the basis of decision of Supreme Court in CIT vs. Alom Extrusions Ltd (2009) 319 ITR 306 (SC) and other cases such as CIT Vs Magus Customers Dialog (P) Ltd (Kar), CIT Vs Sabri Enterprises (2008) 298 ITR 141 (Kar), M/s Essae Teraoka (P.) Ltd vs DCIT - [2014] 43 taxmann.com 33 (Karnataka) Consultants India P Ltd Vs CIT Bangalore III (2013) 597/34 Taxman.com 20 (Kar). 4. However the CPC by the impugned order dismissed the appeal of the Assessee. In so far as the disallowance of employee share of PF is concerned, the CIT(A) referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year, in which such sum is actually paid by him. Proviso to the said section provides that nothing contained in this section shall apply in relation to any sum which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to explanation 5 by the Finance Bill 2021 was only declaratory / clarificatory in nature and there therefore was applicable with retrospective effect by necessary intendment of deeming nature expressly stated therein. 7. In Assessment Year 2019-2020, the facts are identical except that the facts in that year, disputed addition is employee s share of contribution to PF and the addition made in this regard is a sum of ₹ 67,152/-. Otherwise, the discussion on the issue in the intimation under section 143(1) as well as the appellate order is identical. 8. Aggrieved by the orders of the CIT(A), the assessee is in appeals before the Tribunal. We have heard the rival submissions. We find that identical issue has been dealt with in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in the earlier paragraph of this order on identical issue the tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act in both the Assessment Years deserves to be deleted. 10. In the result, both the appeals of the assessee are allowed. Pronounced in the open court on the date mentioned on the caption page. - - TaxTMI - TM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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