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TMI Blog2022 (5) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... these are being disposed off by this common order for the sake of convenience and brevity. 3. At the outset of hearing, the Bench observed that there is delay of 135 days in filing the appeal by the assessee for which the ld. AR of the assessee filed a condonation application dated 08.04.2022 along with Hon'ble Supreme Court order, vide Misc. Application No. 665/2021 in SMW (c) No. 03/2020 dated 10.01.2022 mentioning therein that delay in filing the appeal by the assessee is occurred due to lockdown. Thus, the ld. AR of the assessee prayed that the assessee is prevented by sufficient cause in late filing the appeal before ITAT and the delay occurred may kindly be condoned. 4. During the course of hearing, the ld. DR has no objection to assessee application for condonation of delay and prayed that court may decide the issue as deem fit and proper in the case. 5. We have heard the rival contentions and perused the materials available on record. The prayer as mentioned by the assessee for condonation of delay of 135 days has merit and we concur with the submission of the assessee. Thus the delay of 135 days in filing the appeal by the assessee is condoned. 6 As a lead case, for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee before the ld. CIT(A) contended that when the amount of employee's contribution to ESI & PF is deposited before the due date of filing of return of income, no disallowance U/s 36(1)(va) can be made and that this issue is settled in favour of the assesseee by the judgments of Hon'ble Supreme Court, High Courts and ITAT, which are produced as under:- "1. Jaipur Vidhyut Vitran Nigam Limited 265 CTR 62 (Raj.). 2. VIT vs. State Bank of Bikaner and Jaipur (2014) 99 DTR 131 (Raj.). 3. AIMIL Ltd. 321 ITR 508 (Delhi H.C.) 4. CIT vs. P.M. Electronics Ltd. 313 ITR 161 (Delhi (HC) 5. ACIT vs. Ranbaxy Laboratories Ltd. 20 taxmann.com 334 6. Universal Precision Screws vs. ACIT 69 taxmann.com 185 7. Rajasthan State Beverages Corporation Ltd. 84 taxmann.com (SC) 10. The assessee before the ld. CIT(A) also contended that the amendment brought in by the Finance Act, 2021 in Section 36(1)(va) of the Act and has also referred to the rationale of the amendment as explained by the memorandum in the Finance Bill, 2021. 11. The ld. CIT(A) finally held that the adjustment made by the AO will fall in the category of S.143(1)(a)(ii) of the Act as it was an incorrect claim of ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered the submissions of both the parties and perused the material available on record. In the present cases, it is noticed that an identical issue having similar facts has already been adjudicated by the ITAT, Jodhpur Bench in the aforesaid referred to cases, wherein one of us is author of the order dated 27/09/2021. In the said order it has been held vide paras 7 to 11 in ITA No. 59/Jodh/2021 for the assessment years 2015-16 in the case of Mohangarh Engineers and Construction Company Vs. DCIT and in the case of Bikaner Ceramics Private Limited, Bikaner Vs. ADIT, CPC, Bangaluru, in ITA No. 60/Jodh/2021 for the A.Y. 2019-20 as under:- 7. We have considered the submission of both the parties and perused the material available 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 Koltaka, ITA No. 186/Kol/2021 for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of Section 43(B) of the Act. We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal. Urgent xerox certified copy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities." In the light of the aforesaid discussion we do not accept the Ld. CIT(A)'s stand denying the claim of assessee since assessee delayed the employees contribution of EPF & ESI fund and as per the binding decision of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of return of income u/s 139(1) of the Act. 14. The issue is no more res integra in light of series of decisions rendered by the Hon'ble Rajasthan High Court starting from CIT vs. State Bank of Bikaner & Jaipur (supra) and subsequent decisions. 15. In this regard, we may refer to the initial decision of Hon'ble Rajasthan High Court in case of CIT vs. State Bank of Bikaner & Jaipur wherein the Hon'ble High Court after extensively examining the matter and considering the various decisions of the Hon'ble Supreme Court and various other High Courts has decided the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o to adduce evidence regarding such deposit on or before the return of income under sub-section (1) of Section 139 of the IT Act. 23. Thus, we are of the view that where the PF and/or EPF, CPF, GPF etc., if paid after the due date under respective Act but before filing of the return of income under Section 139(1), cannot be disallowed under Section 43B or under Section 36(1)(va) of the IT Act." 16. The said decision has subsequently been followed in CIT vs. Jaipur Vidyut Vitran Nigam Ltd. (supra), CIT vs. Udaipur Dugdh Utpadak Sahakari Sangh 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 v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsurance Fund should be made within the time mentioned in section 36(1)(va), that is, the time allowed under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, as well as the Employees' State Insurance Act, 1948, it treated as retrospective in nature. If the employees' contribution is not deposited thereafter, the employer not only pays interest and delayed payment but can incur penalties also, for which specific provisions are made in the those Acts. In so far as Income-tax Act, 1961, is concerned, the assessee can get the benefit of deduction of the payments, if the actual payment is made before the return is filed. Where for the assessment year 2002-03 the assessee had deposited employer's contribution as well as employees' contribution towards provident fund and ESI after the due date, as prescribed under the relevant Act/Rules but before the due date for filing the return under the Income-tax Act: Held accordingly, that no disallowance could be made in view of the provisions of Section 43B as amended by the Finance Act, 2003." 17. From the above discussion, it is clear that there are series of decisions of various Hon'ble High Courts on this issue an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provides that, for the purposes of this clause, "due date" to mean the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued there-under or under any standing order, award, contract of service or otherwise. Section 43B specifies the list of deductions that are admissible under the Act only upon their actual payment. Employer's contribution is covered in clause (b) of section 43B. According to it, if any sum towards employer's contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employees is actually paid by the assessee on or before the due date for furnishing the return of the income under sub-section (1) of section 139, assessee would be entitled to deduction under section 43B and such deduction would be admissible for the accounting year. This provision does not cover employee contribution referred to in clause (va) of sub-section (1) of section 36 of the Act. Though section 43B of the Act covers only employer's contribution and does not cover employee contribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent u/s. 143(1)(a)(ii) for Rs. 2,45,637/- by disallowing PF and other contribution paid after due date prescribed by respective labour laws, out of sum collected from employees contribution to PF/ESIC etc. The assessee has stated that disallowance of Rs. 2,45,637/- was not in accordance with the provision of Section 43B of the Act as the said amount were duly remitted before the due date of filling of return of income. The appellant has referred to the decisions of various High Courts including the decision of jurisdictional Rajasthan High Court in the case of Rajasthan State Beverages Corporation Ltd 392 ITR 2 and similar other decisions on this issue. 19. After considering the above findings of CIT(A), now we have gone through ratio laid down by the Hon'ble Supreme Court in the case of CIT vs. Vatika Township Pvt. Ltd. (2014) 367 ITR 466, wherein the Hon'ble Supreme Court held that unless contrary intention appears, a legislation is presumed not to be intended to have a retrospective operation. The idea behind the rule is that a current law should govern current activities. The law passed today cannot be applied to the events of the past. The Hon'ble Supreme Court held that if s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed date; (ii) retrospective amendment with effect from a fixed anterior date; and (iii) clarificatory amendments which are retrospective in nature. Thus, it was a conscious decision of the legislature, even when the legislature knew the implication thereof and took note of the reasons which led to the insertion of the proviso, that the amendment is to operate prospectively. Learned counsel appearing for the assessees sagaciously contrasted the aforesaid stipulation while effecting amendment in Section 113 of the Act, with various other provisions not only in the same Finance Act but Finance Acts pertaining to other years where the legislature specifically provided such amendment to be either retrospective or clarificatory. In so far as amendment to Section 113 is concerned, there is no such language used and on the contrary, specific stipulation is added making the provision effective from 1st June, 2002. (e) There is yet another very interesting piece of evidence that clarifies the provision beyond any pale of doubt, viz. understanding of CBDT itself regarding this provision. It is contained in CBDT circular No.8 of 2002 dated 27th August, 2002, with the subject "Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue hardship and for that reason Parliament specifically chose to make the proviso effective from June 1, 2002." 20. As per ratio laid down by the judgment of Hon'ble Supreme Court in Vatika Township P. Ltd. (Supra), there cannot be imposition of any tax without the authority of law and such law has to be unambiguous and should prescribe the liability to pay taxes in clear terms. 21. By considering various decisions passed by this Bench, that this issue is settled in favour of the assessee by the Judgments of this Hon'ble Bench: * Pratap Technocrats Pvt, Ltd. vs. ADIT in ITA No. 18/JP/2022 dated 22.02.2022. * Prahlad Narayan Bairwa vs. ADIT in ITA No. 33/JP/2022 dated 22.02.2022. * Jairaj vs. ADIT in ITA No. 24,25 & 26/JP/2022 dated 22.02.2022. * The Earth House Resorts LLP vs. ADIT in ITA No. 28/JP/2022 dated 22.02.2022. * Group Zeor vs. ITO in ITA No. 250/JP/2021 dated 01.03.2022. * Karni Kehar Security Co-operative Scoeity Ltd. vs. DCIT in ITA No. 310/JP/2021. * Devi Shanker vs. DCIT in ITO 35/JP/2022 dated 01.03.2022. 22. By considering the totality of the facts and the various judicial pronouncements, we are of the view that the amendment brought in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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