TMI Blog2022 (4) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... ucts Private Limited Versus DCIT CPC, Bangalore. M/s. Ultracon Structural Systems Private Limited Versus ITO Corporate Circle -3(2), Chennai. M/s. Wheels India Ltd Versus ACIT Large Tax Payer Unit -1, Chennai. Mudhra Fine Blanc Private Limited Versus CIT(Appeals) National Faceless Appeal Centre. M/s. G B R Minerals Pvt. Ltd., Versus ITO Corporate Circle -2(2), Chennai. M/s. Sree Gokulam Chit and Finance Co. P Ltd. Versus ADIT CPC, Bangalore Anjappar Chettinad Restaurant Madurai LLP Versus ACIT Central Circle - 1(3), Chennai T A V Company Versus CPC Income Tax Department, Bengaluru M/s. DFE Pharma India LLP Versus ADIT CPC, Bengaluru Sri Kumaraguru Mill Limited Versus DCIT CPC, Bangalore HON BLE SHRI MAHAVIR SINGH, VICE PRESIDENT AND HON BLE SHRI MANOJ KUMAR AGGARWAL, AM Assessee by : S. Sridhar, Advocate ORDER Manoj Kumar Aggarwal (Accountant Member) :: 1. All these appeals were heard as bunched matters since the same pertain to single common issue of assessee s eligibility to claim deduction of Employees Contribution to PF / ESI in terms of Sec.43B r.w.s. 36(1)(va) as well as 2(24)(x). During hearing before us, it was admitted po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income u/s 139(1). The learned ARs also submitted that legal grounds raised in this regard or any other ground raised in the appeals are not being pressed by the assessee. It was common plea that the adjudication may be restricted only to the merits without delving into the legal grounds or any other grounds raised by the assessee. 4. In the above background, the assessee s ground on merit would succeed considering our order in M/s Benco Thermal Technologies Private Ltd. V/s Asstt. Director of Income Tax (ITA No.281/Chny/2021 on 23.02.2022), the operative portion of which read as under: - Our findings and Adjudication 4. We find that as per the provisions of clause (b) of Sec.43B of the Act, any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund and gratuity fund or any other fund for the welfare of employees would be allowed as deductions only on actual payment. However, the proviso to Sec. 43B provides that if the said sum is paid on or before due date for furnishing of return of income u/s. 139(1) of the Act, the deduction would still be available to the assessee. The term Income as defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee before due date of filing of return of income u/s 139(1) would be an allowable deduction. The same was on the reasoning that the provisions of Sec.43B provide an extension to the employer to make payment of welfare funds by 'due date' applicable for furnishing the return of income u/s 139(1). It was held that the provisions of Sec.43B start with non-obstante clause and provide that notwithstanding anything contained in any other provision contained in this Act, a deduction otherwise allowable in this Act in respect of any sum payable by the assessee as an employer by way of contribution to any welfare fund, shall be allowed if it is paid on or before the due date as contemplated under Section 139(1). This provision has nothing to do with the consequences provided for under the PF Act / PF Scheme / ESI Act, for not depositing the 'contribution' on or before the due dates as specified therein. It was examined that the expression 'contribution' as defined in Section 2(c) under the PF Act would mean a contribution payable in respect of a member under the scheme or the contribution payable in respect of an employee to whom the Insurance Scheme applies. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot being deposited by the assessees though substantial benefits had been obtained by them in the shape of the amount having been claimed as a deduction but the said amounts were not deposited. The court observed that the respective Act such as PF etc. also provides that the amounts can be paid later on subject to payment of interest and other consequences and to get benefit under the Income Tax Act, an assessee ought to have actually deposited the entire amount as also to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. Following the same, similar decision was rendered in Pr. CIT V/s Rajasthan State Beverages Corpn. Ltd. (supra). 8. We find that the revenue preferred Special leave Petition (SLP) against this decision which was dismissed by Hon ble Supreme Court (reported as 84 Taxmann.com 185; 04/07/2017) with following observations: - 1. Delay condoned. 2. We do not find any merit in this petition. The special leave petition is, accordingly, dismissed. In other words, the issue could be said to have attained finality since no merit was found in the revenue s petition by Hon ble Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;s contribution towards Provident Fund and ESI after due date as prescribed under the relevant Act, but before the due date of filing of return under the Income Tax Act, no disallowance could be made in view of the provisions of Section 43B as amended by Finance Act, 2003. 6. In the present case, the assessee had remitted the employees contribution beyond the due date for payment, but within the due date for filing the return of income. Hence, following the above-said decisions, we find no reason to differ with the findings of the Tribunal. Accordingly, we find no question of law much less any substantial question of law arises for consideration in these appeals. Accordingly, both the Tax Case (Appeals) stand dismissed. No costs. Consequently, M.P.No.1 of 2015 is also dismissed. However, in later decision titled as Unifac Management Services (India) P. Ltd. V/s DCIT (100 Taxmann.com 244; 23.10.2018), the single judge bench of Hon ble Court has held that the scope of Section 43B and Section 36(1)(va) are different and thus, there is no question of reading both provisions together to consider as to whether assessee-employer is entitled to deduction in respect of sum bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees. The controversy as to the date of applicability of amendment arises in view of the fact that both the Memorandum as well as the Finance Bill state that relevant amendment will take effect on 01/04/2021 and apply to Assessment Year 2021-22 and subsequent assessment years. The submissions of the revenue would be that the amendment is merely clarificatory in nature and would have retrospective operation. However, the assessee would maintain that the provisions would have prospective operations only and the pre-amended period would be largely guided by the ratio of judicial pronouncements favoring the assessee. 13. We find that this issue has already been settled by co-ordinate bench of this Tribunal in Adyar Anand Bhawan Sweets India Pvt. Ltd. V/s ACIT (134 Taxmann.com 56; 08.12.2021). In the said decision, it has already been held by the coordinate bench that the amendment to Sec.36(1)(va) by way of insertion of explanation-2 would operate prospectively only. This view has been taken by the bench considering the ratio of decision of Hon ble Supreme Court in the case of CIT v. Vatika Township (P.) Ltd. [2014] 49 taxmann.com 249/227 Taxman 121/367 ITR 466 (SC) and it was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 taxmann.com 160/217 Taxman 207 (Mag.)/[2014] 366 ITR 167 (Punj. Har.). 6.8 In the present case also, before insertion of Explanation 2 to section 36(1)(va) of the Act, there is ambiguity regarding due date of payment of employees' contribution on account of provident fund and ESI, whether the due date is as per the respective acts or up to the due date of filing of return of income of the assessee. As noted by Hon'ble Supreme Court an amendment made to a taxing statute can be said to be intended to remove hardship only of the assessee and not of the Department. Imposing of a retrospective levy on the assessee would be caused undue hardship and for that reason Parliament specifically chose to make the proviso effective from a particular date. In the present case also, the amendment brought out by Finance Act, 2021 w.e.f. 1-4-2021 i.e. for and from assessment year 2021-22 of Explanation 2 to s. 36(1)(va) of the Act and not retrospectively. 6.9 Thus, from the above, it is clear that the amendment brought in the statute i.e., by Finance Act, 2021, the provisions of section 36(1)(va) r.w.s. 43B of the Act amended by inserting Explanation 2 is prospective and not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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