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TMI Blog2022 (5) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 ['the Act' for short] in AY 2018-19. 2. The assessee filed its return of income for AY 2018-19 on 30.03.2019. The return of income was processed u/s. 143(1) of the Ac, wherein the disallowance u/s. 36(1)(va) of the Act was made on the ground that the employees contribution to PF and ESI has been paid by the assessee beyond the due date prescribed in the respective Acts. 3. The assessee challenged the above said addition by filing appeal for the impugned year before Ld. CIT(A) contending that the disallowance should not be made, since the above said payment has been made prior to the due date prescribed u/s. 139(1) of the Act. In this regard, the assessee relied on various decisions. However, the Ld. CIT(A) rejected the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. Vs. DCIT ( (2014) (43 taxmann.com 33) (Kar) had held that the assessee would be entitled to deduction of employees' contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income u/s. 139(1) of the I.T.Act. It was further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. The relevant finding of the ITAT in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT (supra), reads as follows: "7. We have heard rival submissions and perused the material on record. Admittedly, the assessee has remitted the employees' contribution to ESI before the due date for filing of return u/s. 139(1) of the I.T.Act. The Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 2(24)(x) of the IT Act and in which case, the assessee is liable to pay tax on the said amount treating that as his income, deserves to be rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive from 01.04.2021 and will apply for and from assessment year 2021-2022 onwards. The following orders of the Tribunal had categorically held that the amendment to section 36[1][va] and 43B of the Act by Finance Act, 2021 is only prospective in nature and not retrospective. (i) Dhabriya Polywood Limited v. ACIT reported in (2021) 63 CCH 0030 Jaipur Trib. (ii) NCC Limited v. ACIT reported in (2021) 63 CCH 0060 Hyd Tribunal. (iii) Indian Geotechnical Services v. ACIT in ITA No. 622/Del/2018 (order dated 27.08.2021). (iv) M/s. Jana Urban Services for Transformation Private Limited v. DCIT in ITA No. 307/Bang/2021 (order dated 11th October, 2021) 7.3 In view of the aforesaid reasoning and the judicial pronouncements cited supra, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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