TMI Blog2022 (2) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... ed:- 22-12-2021 - Shri Kul Bharat, Judicial Member For the Assessee : Smt. Divya Phophalia (CA) For the Revenue : Smt. Monisha Choudhary (JCIT) ORDER PER: KUL BHARAT, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre, Delhi (NFAC) dated 30/09/2021 challenging the confirmation of additions in respect of employees contribution towards ESI/PF pertaining to assessment year 2018-19. 2. Briefly the facts of the case are that the assessee filed its return of income electronically on 08/08/2018 declaring total income of ₹ 11,08,760/- same was processed U/s 143(1) in terms of intimation dated 21/01/2019 issued by CPC, Bangalore. It made disallowance of ₹ 17,19,909/- towards employee s contribution towards ESI and EPF. Aggrieved by this, the assessee preferred appeal before the ld. CIT(A), NFAC, who also confirmed the disallowance made U/s 143(1) on account of assessee s failure to pay the employee s contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) of the Act. Against the said order, the assessee is in appeal before this Tribunal. 3. During the course of he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment, it is evident that the law is and has always very clear i.e. employee s contribution to specified fund will not be allowed as deduction U/s 36(1)(va) if there is delay in deposit even by a single day as per the due dates mentioned in the respective legislation. It is also clear that the amendments are only declaratory/clarificatory in nature and are therefore, applicable with retrospective effect by necessary intendment of deeming nature expressly stated therein. The ld. DR accordingly submitted that in view of the unambiguous wording of the now amended provisions of Section 36(1) and 43B, it is clear that the employee s contribution can be allowed as a deduction only if it had been paid within the prescribed due dates under the relevant welfare funds and this position of law is and has always been the case and the clarification brought about by the amendment clearly apply retrospectively. It was therefore rightly held by the ld CIT(A) that the disallowance made U/s 143(1) of the Act by CPC on account of assessee s failure to pay the employees contribution of PF/ESI within the prescribed due dates as per Section 36(1)(va) is strictly in accordance with law and clearly co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, to put a check on the said claims/deductions having been made, the said provision was brought in to curb the said activities and which was approved by the Hon'ble Apex Court in the case of Allied Motors (P) Ltd. (supra). 21. A conjoint reading of the proviso to Section 43-B which was inserted by the Finance Act, 1987 made effective from 01/04/1988, the words numbered as clause (a), (c), (d), (e) and (f), are omitted from the above proviso and, furthermore second proviso was removed by Finance Act, 2003 therefore, the deduction towards the employer's contribution, if paid, prior to due date of filing of return can be claimed by the assessee. In our view, the explanation appended to Section 36(1)(va) of the Act further envisage that the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under Section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that Sec.43B starts with a notwithstanding clause would thus override Sec.36(1) (va) and if read in isolation Sec. 43B would become obsolete. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered view, the ld CIT(A) ought to have considered and followed the decision of the jurisdictional Rajasthan High Court, as evident from series of decisions referred supra, as the same is binding on all the appellate authorities as well as the Assessing officer under its jurisdiction in the State of Rajasthan. 18. In light of aforesaid discussion and in the entirety of facts and circumstances of the case, the addition by way of adjustment while processing the return of income u/s 143(1) amounting to ₹ 4,38,530/- so made by the CPC towards the delayed deposit of the employees s contribution towards ESI and PF though paid well before the due date of filing of return of income u/s 139(1) of the Act is hereby directed to be deleted as the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act in view of the binding decisions of the Hon ble Rajasthan High Court. 6. In the instant case, admittedly and undisputedly, the employees contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s 139(1) of the Act. Further, the ld D/R has referred to the explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
