TMI Blog2022 (5) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... DAV , ACCOUNTANT MEMBER Assessee by : Shri Sudhir Sehgal , Adv. Revenue by : Dr. Ranjeet Kaur , Sr. DR ORDER Per Diva Singh , The present appeal has been filed by the assessee assailing the correctness of the order dated 27.12.2021 of CIT(A)-3, Gurgaon pertaining to 2019-20 assessment year on the following grounds: 1. The Ld. CIT(A)-3 Gurgaon erred on facts and law in confirming the action of the AO of disallowing the amount of Rs. 31,00,186/- u/s. 36(i)(va), while processing the return vide order u/s. 143(1) dated 10.05.2020, on account of payment of employees contribution beyond the due date as prescribed under the relevant Act as the issue is covered by the Judgments of the Hon'ble P H High Court which is a binding precedent. 2. The Ld. CIT(A)-3 Gurgaon erred on facts and law in confirming the action of the AO of disallowing the amount of Rs. 31,00,186/- u/s. 36(i)(va), while processing the return vide order u/s. 143 dated 10.05.2020, on account of payment of employees contribution beyond the due date as prescribed under the relevant Act because the amendment by Finance Bill 2021 is prospective and not retrospective as held by the Chandigarh/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has to be allowed. Support is down from the position of law as considered in ITA No. 373/CHD/2021 dated 21.04.2022 in the case of Vardhman Textiles Ltd. Vs. DCIT is given below:- 4. We have heard the rival submissions and perused the material available on record. The said issue has been considered at length by various orders of the ITAT including the Chandigarh Bench in ITA 194/CHD/2021 dated 18.11.2021 in the case of Surya Resorts Pvt. Ltd. Dharamshala, ITA No. 255/CHD/2011 dated 02.11.2021 in the case of CZAR Faucets Limited in ITA No. 255/CHD/2021 order dated 01.11.2021. In the facts of the present case also, it is seen that the amendments carried out by the Finance Act, 2021 in Section 36(1)(va) and 43B were considered by the First Appellate Authority to be clarificatory in nature, hence, retrospective in operation. We have seen that this issue has been considered by the jurisdictional High Court in the case of CIT Vs Hemla Embroidery Mills (P) Ltd. (2014) 366 ITR 167(P H). The jurisdictional High Court relying upon its own decision in the case of CIT Vs Rai Agro Industries 334 ITR 122 and considering the principle laid down by the Apex Court in the case of CIT Vs A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n nature. The reasoning has been addressed at length in the order dated 02.11.2021 in the case of Shri Sukhdev Singh, Mohali Vs ITO, Chandigarh in ITA 250/CHD/2021 wherein it was held: 4. We have heard the submissions and perused the material available on record. It is seen that the issue is no longer res-integra as the decision of the jurisdictional High Court amongst others has been followed by the ITAT Chandigarh Benches vide its order dated 01.07.2021 in the case of M/s. Jupiter Aqua Lines Pvt. Ltd. Vs DCIT ITA 83/CHD/2021 and order dated 04.10.2021 in the case of Ajay Piplani Vs Assistant Director of Income Tax, CPC, Bengaluru in ITA No. 114/CHD/2021. Similar view has been expressed by the Delhi Benches vide order dated 03.08.2021 in Insta Exhibitions Pvt. Ltd. Vs Addl. CIT, New Delhi in ITA No. 6941/Del/2017, Hyderabad Benches vide order dated 01.07.2021 in M/s. Crescent Roadways Pvt. Ltd. v. Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018. We find that the issue has been elaborately discussed by the Co-ordinate Benches for example in Insta Exhibitions Pvt. Ltd. (supra) as under: 6. We have carefully considered contentions of the learned departmental representative an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court. Hence, in light of the latest decision in case of Pro Interactive Service (India) Pvt. Ltd., the issue is covered in favour of the assessee. Hence, Ground No. 1 is dismissed. 7. Further with respect to the argument of the learned departmental representative that amendment made with finance act 2021 wherein explanation 1 is added u/s. 36 (1) (va) of the act with effect from 1 April 2021, is applicable to the present case, we referred to the Notes on clauses at the time of introduction of the finance bill 2021 which says as Under:- Clause 8 of the Bill seeks to amend section 36 of the Income-tax Act, relating to other deductions. Sub-section (1) of the said section provides for allowing of deductions provided for in the clauses thereof for computing the income referred to in section 28 of the said Act. Clause (va) of the said sub-section provides for allowance of deduction for 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rected to be deleted. The appeal of the assessee is allowed. Said order was pronounced in the presence of the parties via Webex. (emphasis supplied) 5. Similar view has also been taken in order dated 02.11.2021 in the case of M/s. Czar Faucets Limited Chandigarh Vs DCIT, Bangalore in ITA 255/CHD/2021; in order dated 16.11.2021 in the case of Pooja Sarees, Ambala City in ITA No. 184/CHD/2021 and in order dated 16.11.2021 in the case of M/s. A.K. Creative Outsourcing Services Pvt. Ltd., Baddi in ITA No. 252/CHD/2021. The specific reasoning summing up the legal position on similar facts is extracted hereunder from M/s. A.K. Creative Outsourcing Services Pvt. Ltd.: 5. We have heard the submissions and perused the material available on record. Considering the issue, it is seen that it is no longer res-integra. The controversy whether the Amendments carried out by the Finance Act, 2021 in Section 36(1)(va) and u/s. 43B of the Act were prospective in nature or retrospective, hence clarificatory in nature have been put to rest by consistent orders of the different Benches of the ITAT namely order dated 03.08.2021 in Insta Exhibitions Pvt. Ltd. Vs Addl. CIT, New Delhi in IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter making the specific payments. The position of law that the Amendments carried out by the Finance Act, 2021 are prospective in nature and not declaratory stand well settled. The disallowance, accordingly, cannot be sustained. 7. Before parting, it is necessary to refer to the decision of the jurisdictional High Court referred to by the assessee in the specific ground No. 2 raised in the present appeal wherein the decision of the Hon'ble Himachal Pradesh High Court in the case of CIT vs Nipso Polyfabriks Ltd. [2013] 350 ITR 327 has been relied upon. The said decision, it is seen, specifically deals with the employees' contribution. Their Lordships relying upon decision of the Apex Court in the case of CIT Vs Alom Extrusions Ltd. (2009) 319 ITR 306 (which was in the context of employers' contribution) referring to the decision of the Hon'ble Delhi High Court in the case of CIT Vs Aimil Ltd. (2010) 321 ITR 508 took specific cognizance of the fact that this decision pertained to the employee's contribution wherein again a reference had been made to the decision of the Apex Court in the case of CIT Vs Vinay Cement 313 ITR 1. Considering the reasoning in these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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