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TMI Blog2022 (5) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, the CPC had made a disallowance vide intimation u/s 143(1) of the Act by enhancing the total income by making addition of Rs.28,83,403/-, on account of disallowance of PF/ESI u/s 36(1)(va). NFAC has upheld the disallowance after detailed discussion and referring to various judgments in support of the legal proposition that the amendment which has been brought into by Finance Act, 2021 w.e.f. 01.04.2021 by bringing Explanation 5 in section 43B and amending clause (va) of section 36(1) is retrospective being clarificatory amendment. 4. Now, this issue stands covered by series of decisions of this Tribunal following various judgments of Hon'ble High Courts including Delhi High Court that, if the payment of employees contribution t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd ESI have been paid before the due date of filing of return of income u/s.139(1), then it is allowable under the provision of Section 43B. This position was clear by the judgment of Hon'ble Jurisdictional High Court in the case of CIT vs. AIMIL Ltd. as reported in (2009) 321 ITR 508 (Delhi) wherein following the ratio and principle laid down by the Hon'ble Apex Court in the case of Vinay Cement (supra), their Lordship have held as under: "14. When we keep that proposition in mind and also take into consideration various judgments where Vinay Cement (supra) is applied and followed, it will not be possible to accept the contention of the Revenue. 15. In CIT v. Dharmendra Sharma, 297 ITR 320, this Court specifically dealt with this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issues Ltd: (2008) Taxindiaonline.com 104 (TIOL) the issue requires consideration. According to us, in view of the dismissal of the Special Leave Petition in the case of Vinay Cement (supra) by the Supreme Court by a speaking order, the submission of the learned counsel for the Revenue has to be rejected at the very threshold. The reason for the same is as follows:- 9. The Gauhati High Court in the case of CIT v. George Williamson (Assam) Ltd: (2006) 284 ITR 619 (Gauhati) dealt with the very same issue. In the said judgment the Division Bench of the Gauhati High Court noted a contrary view taken by the Kerala High Court in the case of CIT v. South India Corporation Ltd: (2000) 242 ITR 114. After noting the said judgment the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that he has contributed to provident fund before filing of the return. Special Leave Petition is dismissed." 10. In view of the above, it is quite evident that the special leave petition was dismissed by a speaking order and while doing so the Supreme Court had noticed the fact that the matter in appeal before it pertain to a period prior to the amendment brought about in Section 43B of the Act. The aforesaid position as regards the state of the law for a period prior to the amendment to Section 43B has been noticed by a Division Bench of this Court in Dharmendra Sharma (supra). Applying the ratio of the decision of the Supreme Court in Vinay Cement (supra) a Division Bench of this Court dismissed the appeals of the Revenue. In the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tood merged in the order of the Supreme Court rejecting special leave petition or that the order of the Supreme Court is the only order binding as res judicata in subsequent proceedings between the parties." 11. Upon noting the observations of the Supreme Court in Kunhayammed and Others (supra) the Division Bench of the Madras High Court in the case of Nexus Computer Pvt Ltd (supra) came to the conclusion that the view taken by the Supreme Court in Vinay Cement (supra) would bind the High Court as it was non declared by the Supreme Court under Article 141 of the Constitution. 12. We are in respectful agreement with the reasoning of the Madras High Court in Nexus Computer Pvt Ltd (supra). Judicial discipline requires us to follow the view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Revenue are dismissed." 8. Apart from above, there are series of judgment of Hon'ble Jurisdictional High Court on the same principle, like in the case of CIT vs. PM Electronics Ltd. 171 taxmann. com 1, CIT vs. SPL Industries Ltd. (2011) 9 taxmann.com 195, CIT vs. Dharmendra Sharma, 297 ITR 220. Again following the decision of the Jurisdictional High Court which are based on the principle laid down in the case of Vinay Cement (supra), the co-ordinate Bench have passed series of judgment holding the same proposition that prior to the amendment brought in the statute w.e.f. 01.04.2021, no disallowance can be made that the payment to the employee's contribution to PF and ESI paid by the assessee before the due date of filing of ret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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