TMI Blog2021 (12) TMI 1251X X X X Extracts X X X X X X X X Extracts X X X X ..... o PF and ESI were paid before the due date of return of income prescribed under section 139(1) of the Act. However, assessee s claim has been disallowed by applying the amended provisions of section 36(1)(va) and 43B of the Act. Though, the amendment to the aforesaid provisions restricting the applicability of section 43B to employee s contribution to PF and ESI as well as explaining the due date of payment of the aforesaid dues have been brought into the statute by Finance Act 2021 w.e.f. 1.4.2021, however, Commissioner (Appeals) has applied them to the impugned assessment year by stating that the amendments will have retrospective operation as they are clarificatory in nature. However, as find this issue is squarely covered in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to section 36(1)(va) by Finance Act 2021 w.e.f. 1.4.2021 and the corresponding amendment made to section 43B by inserting Explanation 5, learned Commissioner (Appeals) held that as a result of such amendment, the assessee would not be eligible to claim deduction of employee s contribution to PF and ESI, if, such amount is not paid within the due date prescribed under the relevant Act and Rule. While doing so, he also referred to the explanatory note to the amendment made and held that such amendment would apply retrospectively as it is clarificatory in nature and only explains the meaning of due date as provided under the relevant statutory provisions. Thus, he upheld the disallowance. 4. Learned Counsel appearing for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment to the aforesaid provisions restricting the applicability of section 43B to employee s contribution to PF and ESI as well as explaining the due date of payment of the aforesaid dues have been brought into the statute by Finance Act 2021 w.e.f. 1.4.2021, however, learned Commissioner (Appeals) has applied them to the impugned assessment year by stating that the amendments will have retrospective operation as they are clarificatory in nature. However, as I find this issue is squarely covered in favour of the assessee by the decision of the Coordinate Bench in case of Mr. Vansh Jain vs DCIT (supra). While considering identical disallowance made by applying the amended provisions of section 36(1)(va) and section 43B, the coordinate benc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harat Hotels Ltd., (supra), the Hon'ble Delhi High Court in the case of PCIT vs., Pro Interactive Service (India) Pvt. Ltd., vide ITA.No.983/2018 order dated 10.09.2018 has held that no disallowance is called for where the assessee had paid the employees' contribution to PF ESI before the due date of furnishing of return of income under section 139(1) of the I.T. Act, 1961. 7.1.1 find the Hon'ble Delhi High Court in the case of Pro Interaction Service (India) Pvt. Ltd., (supra), following the decision in the case of CIT vs., AIMIL Ltd., (supra), has held that legislative intent was/is to ensure that the amount paid is allowed as expenditure only when payment is actually made. It was further held that it was not the legis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinate bench in case of DCIT Vs Dee Development Engineers in ITA No. 4959/DEL/2016 (A.Y 2011-12) has held as Under:- 7. We have heard both the parties and perused all the relevant material available on record. As regards Ground No. 1, the assessee company has not deposited the employees' contribution within the due date which is prescribed under the said statute i.e. Provident Fund and ESIC. This issue is dealt by the Hon'ble Delhi High Court in case of CIT vs. M/s Bharat Hotels Ltd. 410 ITR 417 wherein the issue is decided in favour of the revenue, without considering the decision of the Hon'ble Delhi High Court in case of CIT vs. AIMIL Ltd.(20io) 321ITR 508 (Del.). But the Ld. AR relied upon the decision of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income tax Act, relating to other deductions. Sub-section (1) of the said section provides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deduction for any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation to the said clause provides that for the purposes of this clause, due date means the date by which the assessee is required as an employer to credit an employee's contribu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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