TMI Blog2022 (5) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and subsequent assessment years and therefore, the said amendment is not applicable to the assessment year under consideration. - Decided in favour of assessee. - ITA No. 20/JP/2022 - - - Dated:- 29-3-2022 - SHRI SANDEEP GOSAIN, JM AND SHRI RATHOD KAMLESH JAYANTBHAI, AM Assessee by : Shri Manish Agarwal, CA Revenue by: Smt. Runi Pal, Addl. CIT ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal by the assessee is directed against the order of the ld. CIT(A) dated 29-11-2021 National Faceless Appeal Centre, New Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2018-19. 2. The hearing of the appeal was concluded through video conference by both the parties in view of the prevailing situation of Covid-19 Pandemic. 3.0 The grounds of appeal raised by the assessee are as under:- 1 That the ld. CIT(A)/NFAC erred in disallowing Provident Fund and Employees State Insurance Payments amounting to Rs.11,52,115/- deposited before the due date of filing of the return during the year. 2. That the order passed by the ld. AO is bade in law as well as on facts 3.1 Thus, the only issue arises in this appeal of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021, it is worthwhile to record the extract of the memorandum explaining the change made in the relevant provisions of the Act. Rationalisation of various Provisions Payment by employer of employee contribution to a fund on or before due date Clause (24) of section 2 of the Act provides an inclusive definition of the income. Subclause (x) to the said clause provide that income to include any sum received by the assessee from his employees as contribution to any provident fund or superannuation fund or any fund set up under the provisions of ESI Act or any other fund for the welfare of such employees. Section 36 of the Act pertains to the other deductions. Sub-section (1) of the said section provides for various deductions allowed while computing the income under the head =Profits and gains of business or profession .Clause (va) of the said subsection provides for deduction of any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation to the said clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy that the provision of section 43B does not apply and deemed to never have been applied for the purposes of determining the due date under this clause; and (ii) amend section 43B of the Act by inserting Explanation 5 to the said section to clarify that the provisions of the said section do not apply and deemed to never have been applied to a sum received by the assessee from any of his employees to which provisions of sub-clause (x) of clause (24) of section 2 applies. These amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years. 3.5. Thus, it is clear that the provision is not retrospective and prospective. Before the Tribunal, the ld. AR of the assessee has submitted that this issue is covered by the various decisions of this Tribunal as well as the Hon ble Jurisdictional High Courts. He has relied on the following decisions:- (i) CIT vs Sangun Foundary Pvt. Ltd. (Income Tax Appeal No. 87 to 2006. (ii) PCIT vs Rajasthan State Beverages Corp. Ltd. 250 Taxmann 16. (iii) K.S. Automobiles Pvt. Ltd (ITA No. 1184/JP/2018 dated 8- 03-2019. (iv) ACIT New De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of filing of return of income u/s 139(1) and the last of such deposits were made on 16.04.2019 whereas due date of filing the return for the impugned assessment year 2019-20 was 31.10.2019 and the return of income was also filed on the said date. Admittedly and undisputedly, the employees s contribution to ESI and PF which have been collected by the assessee from its employees have thus been deposited well before the due date of filing 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 analyz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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. It is pertinent to note 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. 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 afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view has been taken by the Coordinate Bangalore Benches in case of Shri Gopalkrishna Aswini Kumar vs. ACIT (supra) wherein it has held as under:- 7. The Hon'ble Karnataka High Court in the case of Essae Teraoka Pvt. Ltd., (supra) has taken the view that employee's contribution under section 36(1)(va) of the Act would also be covered under section 43B of the Act and therefore if the share of the employee's share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon'ble Karnataka High Court. The next aspect to be considered is whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also. On this aspect, we find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amounts are deposited before filing the return of income. Similar view has also been taken by the Hon ble Punjab Haryana High Court in the case of CIT vs. Hemla Embroidery Mills (P) Ltd (supra) and Indian Geotechnical Services (supra). As far as the applicability of amendment made by Finance Act 2021 is concerned, I find that the Co-ordinate Bench of Tribunal in the case of Indian Geotechnical Services (supra) has held that amendment made by Finance Bill 2021 shall take effect from 1st April 2021 and will accordingly apply to A.Y. 2021-11 and subsequent years. In the present case assessment year involved is 2018-19 and therefore following the aforesaid decision in thecase of Indian Geotechnical Services (supra), I am of the view that the amended provisions would have no application to the case under consideration. Before me, Learned DR has relied on the decision of Co-ordinate Bench of Tribunal in the case of Vedvan Consultants Pvt. Ltd. (supra). It is settled law that when two judgments are available giving different views then the judgment which is in favour of the assessee shall apply as held in case of Vegetable Products Ltd. 82 ITR 192 by the Hon ble Supreme Court. I th ..... 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