TMI Blog2022 (5) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... ASSESSEE BY : SHRI MANISH MALIK , ADVOCATE REVENUE BY : SHRI OM PRAKASH , SENIOR DR ORDER The aforesaid appeal has been filed by the assessee against the impugned order passed by the ld. CIT (Appeals)-2, New Delhi for the Assessment Year 2018-19 vide order dated 21.08.2020. 2. In the aforesaid appeal, the assessee had challenged the disallowance of payment of employees contribution towards Provident Fund and ESI under section 36(1)(va) read with section 43B of the Income-tax Act, 1961 (for short the Act ). 3. In 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.2,20,135/-, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Guwahati High Court, as affirmed by the Supreme Court in Vinay Cement (supra), the appeal of the Revenue was dismissed. More detailed discussion is contained in another judgment of this Court in CIT v. P.M. Electronics Ltd. (ITA No. 475/2007 decided on 3.11.2008). Specific questions of law which were proposed by the Revenue in that case were as under :- (a) Whether amounts paid on account of PF/ESI after due date are allowable in view of Section 43B, read with Section 36(1)(va) of the Act? (b) Whether the deletion of the 2nd proviso to Section 43B by way of amendment by the Finance Act, 2003 is retrospective in nature? 16. These questions were answered by the Division Bench in the following manner :- 7. Having heard the learned counsel for the Revenue, as well as, the assessee, we are of the view that the view taken by the Tribunal deserves to be sustained as it is no longer res integra in view of the decision of the Supreme Court in the case of CIT v Vinay Cement Ltd: 213 ITR 268 which has been followed by a Division Bench of this Court in the case of CIT v. Dharmendra Sharma: 297 ITR 320. 8. Despite the aforesaid judgments, the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, the assessee was entitled to claim the benefit in Section 43-B for that period particularly in view of the fact 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 passing we may also note that a Division Bench of the Madras High Court in the case of CIT v. Nexus Computer (P) Ltd by a judgment dated 18.8.08 passed in Tax Case (A) No. 1192/2008 discussed the impact of both the dismissal of the special leave petition in the case of George Williamson (Assam) Ltd (supra) and Vinay Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dismissed. 17. It also becomes clear that deletion of the 2nd proviso is treated as retrospective in nature and would not apply at all. The case is to be governed with the application of the 1st proviso. 18. We may only add that if the employees‟ contribution is not deposited by the due date prescribed under the relevant Acts and is deposited late, the employer not only pays interest on delayed payment but can incur penalties also, for which specific provisions are made in the Provident Fund Act as well as the ESI Act. Therefore, the Act permits the employer to make the deposit with some delays, subject to the aforesaid consequences. Insofar as the Income Tax Act is concerned, the assessee can get the benefit if the actual payment is made before the return is filed, as per the principle laid down by the Supreme Court in Vinay Cement (supra). 19. We, thus, answer the question in favour of the assessee and against the Revenue. As a consequence, the appeals filed by the assessees stand allowed and those filed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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