TMI Blog2021 (12) TMI 815X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is made on or before due date for furnishing the return of income under 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. In this case there is no dispute that the assessee made payment of the Employees share of PF/ESI on or before the due date for filing return of income for AY 2017-18 u/s. 139(1) of the Act. 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 ? - On this aspect, we find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the due date for filing of return u/s. 139(1) of the Act (this fact is not in dispute) and hence has been 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), Consultants India P Ltd. Vs. CIT Bangalore III (2013) 597/34 Taxman.com 20 (Kar). 4. With regard to employee's share of contribution to PF and ESI, the CIT(A) referred to the amendment made to section 36(1)(va) and 43B of the Act by the Finance Act, 2021. The Finance Act, 2021 has amended section 36, sub-section (1), in clause (va), by inserting Explanation-2 which reads thus: Explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 such return. By virtue of insertion of Explanation 5 to this section, the provisions of the said section shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his employees t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Delhi). 6. The CIT(A), thereafter held that the amendment to section 36(1)(va) by insertion of explanation 2 and the amendment to section 43B by insertion 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. The CIT(A) upheld the addition made by the AO. 7. We find that identical issue has been considered in the following decisions: M/s. Mahadev Cold Storage vs. Jurisdictional AO - ITA. No. 41 42/Agra/2021 M/s. Essae Teraoka (P.) Ltd. vs. DCIT - [2014] 43 taxmann.com 33 (Karnataka) Anand Kumar Jain vs. ITO - ITA No. 4192/MUM/2012 Value Momentum Software ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... islature 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, deserves to be deleted. 9. The learned DR submitted that in the event of Hon'ble Supreme Court taking a view as taken by the Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Corporation, the Revenue shall be at liberty to seek rectification. The prayer so made is accepted, subject to statutory limitations, if any. 10. In the result, appeal of the assessee is allowed. Pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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