TMI Blog2022 (3) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of PF/ESI paid within the due date of filing return of income. Though, it was beyond the date mentioned in the respective Act. This view of ours is supported by various judgment relied on by the ld.AR. Accordingly the appeal of the assessee is allowed. - ITA No. 38/Bang/2022 - - - Dated:- 9-3-2022 - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER For the Appellant : Sheetal Borkar, Advocate For the Respondents : Priyadarshi Mishra, Addl. CIT (DR) ORDER Per Chandra Poojari, Accountant Member This appeal by the assessee is against the order dated 8.12.2021 of the CIT(Appeals), National Faceless Appeal Centre (NFAC), Delhi for the assessment year 2018-19 on the following grounds:- 1. The CIT (A) erred in passing the order in the manner he did. 2. The learned CIT(A) erred in making addition without considering submissions of the Appellant. 3. The learned CIT(A) is wrong in law in making the addition of ₹ 10115391 in lieu of ESI and PF payments under Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... na Urban Services For Transformation Pvt. Ltd. v. DCIT, CPC in ITA No. 307/Bang/2021 dated 11.10.2021 wherein it was held as under:- As seen from the above, the assessee made a sum of ₹ 19,04,700/- beyond the time prescribed under the relevant Act. Now the claim of assessee is that the above payment has been made towards PF beyond due date prescribed under the relevant Act, however, the same was made within due date of filing the return of income u/s. 139(1) of the Act for the year under consideration. As such the said amount cannot be disallowed u/s. 36(1)(va) of the Act and it is not hit by explanation 2 to sec. 36(1)(va) of the Act which calls for payment within the due date prescribed under the relevant Act. For this purpose he relied on the judgment in the case of Essac Teraoka (P.) Ltd. v. Dy. CIT 366 ITR 408 (Kar.), wherein it has held as under: 15. From bare perusal of this provision, it is clear that under the provision, for IT Act, an extension is given to the employer to make payment of contribution to provident fund or any other fund till the due date applicable for furnishing the return of income under sub-section (1) of section 139 of the IT Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only to mean contribution of the employer but also contribution to be made on behalf of the member employed by the employer directly. 20. Paragraph-38 of the PF Scheme provides for Mode of payment of contributions. As provided in sub-para (1), the employer shall, before paying the member, his wages, deduct his contribution 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, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he previous year can be claimed by the assessees for deduction out of their gross income. The above said statutory provisions of the Income-tax Act abundantly makes it clear that, the contention urged on behalf of the Revenue that deduction from out of gross income for payment of tax at the time of submission of returns under section 139 is permissible only if the statutory liability of payment of provident fund or other contribution funds referred to in clause (b) are paid within the due date under the respective statutory enactments by the assessees as contended by learned counsel for the Revenue is not tenable in law and therefore the same cannot be accepted by us. 9. The Ld. AR drew our attention to the deletion of the second proviso to section 43B of the Income-tax Act by the Finance Act 2003, which provision has come into force, with effect from April 1, 2004. The reliance placed upon the decision of the apex court in Allied Motors P. Ltd. v. CIT [1997] 224 ITR 677 and also on the decision in General Finance Co. v. CIT (Asst.) [2002] 257 ITR 338 (SC) in respect of applicability of section 43B(b) and also omission of clause (a) or (c) or (d) or (e) or (B referred to above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act 2021, through the explanatory notes, it would necessarily to be held that Explanation 5 to sec. 43B and Explanation 2 to sec. 36(1)(va) would apply to all pending matters as on date. 12. We find no merit in the argument of the Ld. DR since the explanation as provided in Finance Act 2021 prescribes that the amendment in both sec. 36(va) as well as 43B by inserting corresponding explanation that although impugned PF comes in the form of provision and the same is applicable from 1/4/2021 onwards only. In the present case we are concerned with the asst. year 2017-18 and the amended provision could not be applied retrospectively as it is only applicable w.e.f. 1/4/2021. Being so no disallowance could be made by the AO in respect of PF/ESI paid within the due date of filing return of income. Though, it was beyond the date mentioned in the respective Act. This view of ours is supported by various judgment relied on by the Ld. AR. Accordingly the appeal of the assessee is allowed. 6. Accordingly, following the above order of the Tribunal, we allow the grounds taken by the assessee on this issue. 7. In the result, the appeal by the assessee is allowed. Pronounce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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