TMI Blog2022 (5) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... en : Mr.B.K.Bagchi, Sr. DR ORDER PER PAVAN KUMAR GADALE JM: The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi passed u/s 154 and 250 of the Act. The assessee has raised the following grounds of appeal: 1) In the facts and circumstances of the case and in law the Assessing Officer (CPC) erred in adding Rs. 33,73,061/- on account of alleged delay in payment towards Provident Fund, ESIC and any Other Welfare Fund u/s 36(1)(va) r.w.s 43B and 2(24)(x) of the Act thereby a) Disregarding the case laws of Bombay High Court and Supreme Court etc. b) Making adjustment u/s 143(1) which is not permissible because the same are not prima facie adjustment as per various judgements of High Court and Supreme Court. c) By overlooking the fact that even though the same is paid on or before due date of filing of return. 2) In the facts and circumstances of the case and in law, the Commissioner of Income tax (Appeals), NFAC also erred in confirming the disallowance of Rs. 33,73,061/- on account of alleged delay in payment towards Provident Fund, ESIC and any Other Welfare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions in respect of claims and confirmed the action of the A.O and dismissed the assessee appeal. Aggrieved by the CIT(A) order, the assessee has filed an appeal before the Hon ble Tribunal. 4. At the time of hearing, none appeared on behalf of the assessee. The Ld.DR submitted that the explanation 2 to Sec 36(1)(va) of the Act in finance Act 2021 was introduced and the amendment is applicable to the earlier years and supported the order of the CIT(A) appeal. 5. We heard the Ld.DR submissions and perused the material available on record. The contentions are that the asseessee is governed by the law applicable to said Assessment year. Whereas the amended provisions/explanations are w.e.f F.Y 1-4-2021.The assessee for the various reasons could not deposit the employees contribution to provident fund ESIC within the time allowed under prescribed Act. Whereas, the assessee has deposited the amount before filing of the return of income U/sec139(1) of the Act. The Ld.CIT(A) has referred to chart at page 6 to 9 of the order, whereas there is a delay in depositing the employees contribution to provident fund of Rs.29,34,235/- and the employees contribution to ESIC Rs.4,37,050 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f law, the Hon'ble High Court rendered the following findings:- 20. Paragraph-38 of the PF Scheme provides for Mode of payment of contributions. As provided in sub para (1), the employer shall, before paying the member, his wages, deduct his contribution from his wages and deposit the same together with his own contribution and other charges as stipulated therein with the provident fund or the fund under the ESI Act within f if teen days of the closure of every month pay. It is clear that the word contribution used 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 43B of the I.T. Act by Finance Act, 2021 will not have application for the relevant assessment year, namely A.Y. 2019-2020. Accordingly, I direct the A.O. to grant deduction in respect of employees' contribution to PF and ESI since the assessee has made payment before the due date of filing of the return of income u/s 139(1) of the I.T.Act, It is ordered accordingly. 8. In the result, the appeal filed by the assessee is allowed. 10. In view of the judicial pronouncements cited supra, we hold that the amendment to section 36(1)(va) and 43B of the Act will not have application for the relevant assessment year, namely assessment year 2018-2019. Accordingly, we direct the A.O. to grant deduction in respect of employees' contribution to PF and ESI since the assessee made the payment before the due date of filing of return u/s 139(1) on 30.11.2018 of the Act. Accordingly, grounds raised by assessee stands allowed. 7. Similarly in the case of Shri Satish Kumar Sinha Vs. ITO in ITA No.293/Hyd/2021,A.Y 2019-20 order dated 23.08.2021, the Hon ble Tribunal has observed at Para 3.5 as under: 3.5. We have heard both the parties through video conference and gone thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se vide judgment and order dt.26.05.2016 referred to (supra) and has held that the privilege fees being a revenue expenditure, is required to be allowed as a revenue expenditure. This court in the aforesaid case has also allowed the claim of the assessee, in so far as payment of PF ESI etc. is concerned, on the finding of fact that the amounts in question were deposited on or before the due date of furnishing of the return of income and taking in consideration judgment of this Court in CIT v. State Bank of Bikaner Jaipur [2014] 363 ITR 70/43 taxmann.com 411/225 Taxman 6 (Mag.) (Raj.) and CIT v. Jaipur Vidhut Vitaran Nigam Ltd. [2014] 363 ITR 307/49 taxmann.com 540/[2015] 228 Taxman 214 (Mag. ) (Raj. ) and accordingly both the questions are covered by the aforesaid judgment and against the revenue . Against which the revenue has filed SLP before the Hon'ble Supreme Court, which was dismissed by the Hon'ble Apex Court in (2017) [85 taxmann.com 185].Therefore, taking the consistent view and respectfully following the view taken by the Co-ordinate Bench of the ITAT in the case of KLR Industries Ltd., Vs. DCIT (supra), we hold that no disallowance could be made in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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