TMI Blog2022 (4) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Department against the order dt. 27/08/2021 of the Ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi. 2. Following grounds have been raised in this appeal. 1. That the Ld. CIT(A) erred in law, in deleting addition/disallowance of ₹ 4425/- made by the Assessing Officer in respect of delayed payment of employee's contribution, beyond the prescribed time, to the Welfare Funds like Labour Welfare fund etc. 1(a) That the Ld. CIT(A) erred on facts and law ignoring the distinction between provision of section 36(1)(v) r.w.s. 43B and provisions of section 36(1)(va) r.w.s. 2(24)(x) of the Income Tax Act, 1961, which clearly provide for different treatment. While the delayed payment of employers contribution is allowable if found before the filing of return wherever employee's contribution is disallowed for once and all if payment is delayed beyond the prescribed time. 1(b) That the Ld. CIT(A) erred in ignoring and failing to take into account the amendment carried out by Finance Act, 2021 by way of inserting Explanation 1 Explanation 2 below section 36(1)(va) of the Act which has been interpreted by the Hon'ble Appellate Tribunal, Delhi Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on record. 8. In the present cases, it is not in dispute that the assessees deposited the contribution of PF ESI belated in terms of section 36(1)(va) of the Act, however, the said deposits were made prior to filing of return of income u/s. 139(1) of the Act. 8.1 Identical issue with the similar facts have already been adjudicated by the various Benches of the ITAT. 8.2 In the case of Harendra Nath Biswas vs. DCIT Kolkata, ITA No. 186/Kol/2021 for the A.Y. 2019-20, similar issue has been decided vide order dated 16.7.2021 by the ITAT 'B' Bench, Kolkata. The Relevant findings have been given in para 4 of the said order, which read as under;- 4. We have heard both the parties and perused the record. First of all we do not countenance this action of the Ld. CIT(A) for the simple reason that the Explanation 5 was inserted by the Finance Act, 2021, with effect from 01.04.2021 and relevant assessment year before us is AY 2019-20. Therefore the law laid down by the Jurisdictional Hon'ble High Court will apply and since this Explanation-5 has not been made retrospectively. So we are inclined to follow the same and we reproduce the order of Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble High Court in Vijayshree Ltd. (supra) u/s. 36(1)(va) of the Act since assessee had deposited the employees contribution before filing of Return of Income. Therefore, the assessee succeeds and we allow the appeal of the assessee. 9. Similar view has been taken by the ITAT Hyderabad 'SMC Bench in ITA No. 644/Hyd./2020 for the AY 2019-20 in the case of Salzgitter Hydraulics Private Ltd., Hyderabad vs. ITO vide order dt 15.6.2021. The relevant findings given in para 2 of the said order read as under:- 2. Coming to the sole substantive issue of ESI/PF disallowance of ₹ 1,09,343/- and ₹ 3,52,622/-, the assessee's and revenue's stand is that the same has been paid before the due date of filing sec. 139(1) return and after the due date prescribed in the corresponding statutes; respectively. I notice in this factual backdrop that the legislature has not only incorporated necessary amendments in Sections 36(va) as well as 43B vide Finance Act, 2021 to this effect but also the CBDT has issued Memorandum of Explanation that the same applies w.e.f. 1.4.2021 only. It is further not an issue that the foregoing legislative amendments have propos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter in favour of the assessee. In the said decision, the Hon'ble High Court was pleased to held as under: 20. On perusal of Sec. 36(1)(va) and Sec. 43(B)(b) and analyzing the judgments rendered, in our view as well, it is clear that the legislature brought in the statute Section 43(B)(b) to curb the activities of such tax payers who did not discharge their statutory liability of payment of dues, as aforesaid; and rightly so as on the one hand claim was being made under Section 36 for allowing the deduction of GPF, CPF, ESI etc. as per the system followed by the assessees in claiming the deduction i.e. accrual basis and the same was being allowed, as the liability did exist but the said amount though claimed as a deduction was not being deposited even after lapse of several years. 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 cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra), and CIT vs. Rajasthan State Beverages Corporation Limited (supra). In all these decisions, it has been consistently held that where the PF and ESI dues are paid after the due date under the respective statues but before filing of the return of income under section 139(1), the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act. 17. We further note that though the ld. CIT(A) has not disputed the various decisions of Hon'ble Rajasthan High Court but has decided to follow the decisions rendered by the Hon'ble Delhi, Madras, Gujarat and Kerala High Courts. Given the divergent views taken by the various High Courts and in the instant case, the fact that the jurisdiction over the Assessing officer lies with the Hon'ble Rajasthan High Court, in our considered 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 fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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