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TMI Blog2021 (12) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Income Tax Return amounting to Rs. 13,90,975/- a)The Learned Commissioner of Income Tax (Appeals) [herein after referred as 'Ld. CIT(A)'] has erred in law and on facts in confirming the action of Assessing Officer in making addition of Rs. 13,90,975/- on account of remittance of employee's contribution towards ESIC and EPF were made beyond the due dates specified in the respective Act and without appreciating the facts and circumstances of the case and latest law in this regard. b)The Ld. CIT(A) erred in disallowing the amount paid beyond the due dates prescribed under ESIC and EPF Act but remitted prior to filing the return under Section 139(1) of the Income-tax Act, 1961 by ignoring the binding judgment of Honorabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of hearing, it is prayed that the order of the ld.CIT(A) be set aside." 3. All these grounds are directed against a single issue, viz., disallowance of employees contribution to PF and ESI. The facts relating to the said issue are that for the assessment year 2019-2020, return of income was filed on 30.10.2019, declaring income of Rs. 34,94,637. The assessee was served with an intimation u/s 143(1) of the I.T. Act determining total income at Rs. 48,65,612. The reason for the difference between the returned income and the income determined u/s 143(1) of the I.T. Act was the disallowance of sum of Rs. 13,90,975 being late remittance of employees' contribution to PF and ESI under the respective Acts. 4. Aggrieved by the intimation u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Authorities. 7. We heard both parties and perused the records. On identical facts, the Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT (supra) by following the dictum laid down by the Hon'ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra)¸ had held that the assessee would be entitled to deduction of employees' contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s 139(1) of the I.T.Act. It was further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. The relevant finding of the ITAT in the case of M/s. Shakuntala Agarbathi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fund or the fund under the ESI Act within fifteen days of the closure of every month pay. It is clear that the word "contribution" used in Clause (b) of Section 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, contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 following orders of the Tribunal had categorically held that the amendment to section 36[1][va] and 43B of the Actby 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. ACI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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