TMI Blog2022 (1) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra), the employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the I.T.Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee - ITA No.531/Bang/2021 - - - Dated:- 6-12-2021 - Shri George George K, JM And Shri B.R.Baskaran, AM For the Appellant : Smt.Suman Lunkar, CA For the Respondent : Sri.Sankar Ganesh K, JCIT-DR ORDER PER GEORGE GEORGE K, JM This appeal at the instance of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stead, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has erred in holding the adjustment to be in order. 5. In any case, the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has erred in; (a) holding that the employee's contribution for ESI are allowable as deduction only when deposited by the employer within the due dates prescribed under relevant Act or funds. (b) holding that for the relevant year, the provisions of section 43B of the Act were not applicable to the employees share of contribution to the ESI. (c) Holding that the decision of the honourable supreme court and jurisdictional high court is prior to amendment made vide Finance Act 2021. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Act was on account of disallowance of sum of ₹ 3,31,366 being late remittance of employees contribution to PF and ESI under the respective Acts. 4. Aggrieved by the intimation u/s 143(1) of the I.T.Act, the assessee preferred an appeal before the first appellate authority. It was stated that the assessee had paid the employees contribution to PF and ESI prior to the due date of filing of the return u/s 139(1) of the I.T.Act. Therefore, it was submitted that the assessee is entitled to deduction of employees contribution to PF and ESI having regard to the provisions of section 43B of the I.T.Act. In this context, the assessee relied on the judgment of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT 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 Company Vs. DCIT (supra), reads as follows: 7. We have heard rival submissions and perused the material on record. Admittedly, the assessee has remitted the employees' contribution to 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 assessee would be entitled to deduction of employees' contribution to ESI provided the payment was made prior to the due date of filing of return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the view taken by this Court in W.A.No.4077/2013. 23. In the result, the appeal is allowed and the substantial question of law framed by us is answered in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... habriya 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 Act will not have application to relevant assessment year, namely A.Y. 2019- 2020. Accordingly, we direct the A.O. to grant deduction in respect of employees' contribution to ESI since the assessee has made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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