TMI Blog2022 (5) TMI 1333X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER Per Diva Singh The present appeal has been filed by the assessee assailing the correctness of the order dated 12.11.2021 of CIT(A) (NFAC i.e. National Faceless Appeal Centre) Delhi pertaining to 2018-19 assessment year on the following grounds: 1. That ORDER PASSED u/s. 250(6) OF THE Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi is against law and facts on the file in as much as he was not justified to arbitrarily uphold the disallowance of Rs. 4,62,844/- made by Central Processing Centre, Bengaluru in intimation on account late deposit of employee's share towards Provident Fund by resort to provisions of Section 36(1)(va) read with section 2(24) of the Act, whereas the same was paid on or before the filing of return. 2. Addressing the delay of 29 days pointed out by the Registry the ld. AR placed reliance upon the order of Hon'ble Supreme Court dated 10.01.2022 in Miscellaneous Application No. 21 of 2022. In suo moto writ petition No. 3 of 2020 wherein it has been held that the period from 15.03.2020 to 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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. Alom Extrusions Ltd. 319 ITR 306 (S.C.) have addressed the legal position, though it need be clarified that the decision rendered was in the context of amendments carried out by way of Second Proviso to Section 43B which was omitted by Finance Act, 2003. This Amendment was held to be clarificatory and hence would operate retrospectively. In the facts of the present case, Amendment by way of Explanation 2 to Section 36(va) and Explanation 5 to Section 43B by Finance Act, 2021 had been held to be having prospective effect. For the said purposes relying upon the Notes on Clauses at the time of introduction of the Finance Bill, 2021, the Coordinate Benches have consistently held that the said amendments have been inserted w.e.f. assessment year 2020-21 assessment year. For ready reference, relevant extract from ITA No. 194/CHD/2021 in the case of Surya Resorts Pvt. Ltd. Dharamshala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 and perused the orders of the lower authorities. The facts shows that the assessee has collected the sum of Rs. 12,16,260/- being employee's contribution under the provident fund and with respect to ESI laws. The above contribution was admittedly not deposited by the assessee within the due date prescribed under the respective ESI and PF statue however, same was deposited before the due date of filing of return of income. Therefore, the Ld. AO as well as the Ld. CIT(A) disallowed the same holding that such contribution becomes the income of the assessee under the provision of section 2(24)(x) of the Act and thereafter if the same is deposit within the due date prescribed under the respective laws then same is allowable as deduction u/s. 36(1)(va) of the Act. Coordinate bench in case of DOT Vs. Dee Development Engineers in ITA No. 4959/DEL/2016 (A.Y. 2011-12) has held as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ides 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 the said clause provides that for the purposes of this clause, due date means 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 thereunder or under any standing order, award, contract of service or otherwise. It is proposed to insert Explanation 2 to clause (va) of sub-section (1) of the said section so as to clarify that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the due date under the said clause. This amendment will take effect from 1st April, 2021. And will accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. Therefore it is apparent that the above amendment do not apply to the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ITA No. 6941/Del/2017 of the Delhi Benches; order dated 01.07.2021 of Hyderabad Benches in M/s. Crescent Roadways Pvt. Ltd. v. Dy. CIT, Hyderabad in ITA No. 1952/Hyd./2018, order dated 27.08.2021 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 of the ITAT Chandigarh Benches. Reference may also be made to various other orders of the Chandigarh Benches in ITA 250/CHD/2021 in the case of Shri Sukhdev Singh, Mohali and ITA 255/CHD/2021 in the case of M/s. CZAR FAUCETS Ltd. Chandigarh wherein consistently following the decisions of the jurisdictional High Court in the case of CIT Vs. Nuchem Ltd. (ITA No. 323 of 2009) and CIT Vs. Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167, the Tribunal has consistently allowed s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 decisions, Their Lordships in the case of Nipso Polyfabriks Ltd. (supra) consciously followed the view taken by the Hon'ble Delhi High Court in Aimil's case and concluded that the view expressed by the Hon'ble Kerala High Court in CIT Vs. Commonwealth Trust Ltd. (2004) 269 ITR 290 was not being followed as it was considered to be no longer good law in view of the judgment of the Apex Court in Alom Extrusions Ltd. Accordingly, reliance placed by the ld. AR on the decision of the jurisdictional High Court qua the employee's contribution stands addressed in favour of the assessee. However, the said decision has not taken into consideration the change proposed by the Amendments carried out by Finance Act, 2021 which we have addressed at length in the earlier part of this order. This issue stands covered by various decisions of the ITAT which sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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