TMI Blog2022 (6) TMI 1195X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal of the assessee is allowed. - ITA No. 163/JP/2022 - - - Dated:- 16-6-2022 - SHRI SANDEEP GOSAIN , JM And DR MEETHA LAL MEENA , AM Assessee by : Shri S. L. Gupta , CA Revenue by: Shri N. S. Nehra , Addl. CIT ORDER Per Sandeep Gosain , JM The assessee has filed an appeal against order of the Ld. CIT(A) dated 12-03-2022, National Faceless Appeal Centre, Delhi [hereinafter referred to as (NFAC)] for the assessment year 2018-19 wherein the assessee has raised solitary ground as under:- That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in law in sustaining additions made to the returned income by CPC while processing u/s. 143(1) on account of late deposit of employee contribution to PF and ESI u/s. 36(1)(va) of Income Tax Act, 1961 but deposited before due date of filing return. 2.1. The main issue arises in this appeal of the assessee is regarding disallowance of employee's contribution of PF deposited belatedly but before due date of filing of return of income u/s. 139(1) of the Income Tax Act, 1961 (in short, the Act). 2.2. The assessee filed its return of income on 31.10.2018 which was processed u/s. 143 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutes. Also, the AO was well within his jurisdiction of the Act to disallow an incorrect claim apparent from the information in Form No. 3CD attached with the return of income. Accordingly, the addition of Rs. 18,49,116/- by way of disallowance u/s. 36(1)(va) is hereby confirmed. The Ground of Appeal related to invoking sec. 36(1)(va) are dismissed. 2.5. During the course of hearing, the Ld. AR of the assessee prayed that Ld. CIT(A)/NFAC has erred in confirming the addition of Rs. 18,49,116/- on account of late payment of employees PF Contribution for which the Ld. AR of the assessee has filed the following written submission, relying therein various case laws. At the very outset it is submitted that matter relating to disallowance of employee's contribution to PF and ESI is directly covered by the decision of Hon'ble bench of ITAT Jaipur in appellant own case ITA. No. 1064/JP/2018 ay 2014-15 dated 25-04-2019 and also in case of State bank of Bikaner and Jaipur and Jaipur Vidyut Vitran Nigam Ltd. in ITA No. 359/JP/2006, ITA No. 358/JP/2006 ITA No. 825/JP/2008 dt. 30/04/2010, 30/04/2010 24/08/2009 respectively for the Assessment Year 2002-03, 2001-02 and 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2011) so also Commissioner of Income Tax vs. Jaipur Vidyut Viaran Nigam Ltd. (D.B. Income Tax Appeal No. 189/2011), of even date wherein it has been held that if the amount has been deposited on or before the due date of filing the return under Section 139 and admittedly it was deposited on or before the due date then the amount cannot be disallowed under Section 43B of the L.T. Act or under Section 36(1)(va) of the Act. In fact in the above matters one of the party is same as in the present appeals, therefore, the issue is no more res-integra in the light of judgments of this Court referred to supra and, in our view, no substantial question of law arises out of the impugned orders of the ITAT, which may require attention of this Court. 7. We find no merit in these appeals and the same are hereby dismissed. Also a latest decision CIT Vs. Rajasthan State Beverages Corporation Ltd./Rajasthan State Ganganagar Sugar Mill (2017) 250 Taxman 32 (Raj) the Hon'ble High Court held that the employees' contributions to the PF, ESI, etc. made within the due date of filing the return u/s. 139 shall be allowable as deduction. It was submitted that against the aforesaid decision of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted and undisputed fact that the auditor never indicates disallowance nor it is asked from the auditor, they simply report the date of the due date and date of payment. Hence, in view of the above, it may be said that the ITO CPC is wrong in invoking the provision of section 143(1)(a)(iv) of the Income Tax Act on the fallacy of presumption that the auditor has disallowed the employee contribution to EPF/ESI. Further as there are several contrary judgment on the issue of allowability of late deposit of ESI and EPF which has been taken in first para and it cannot fall under the word prime facie adjustment. The issue of disallowance for late deposit of contribution to PF and ESI debatable in nature hence adjustments u/s. 143(1)(a) can not be made. The latest judgment in case S.V. Engineering Constructions India (P) Ltd. Vs. DCIT (ITAT Visakhapatnam) I.T.A. No. 130/Viz/2021 on same facts with referring decision in the case of Andhra Trade Development Corporation in I.T.A. No. 434/Viz/2019 dated 05.05.2021 taken the same view that It is settled issue that no debatable issues are permitted to be made adjustments u/s. 143(1) of the Act. As it is admitted fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecided in favour of the assessee by various binding precedents of Hon'ble High Courts including the Jurisdictional High Court. The limited controversy is whether the amendment brought to Section 36(1)(va) as well as 43B of the Act is applicable retrospective or from assessment year 2021-22 as it is specifically stated in the memorandum of Finance Bill, 2021. At the outset, it is noted that the Coordinate Bench of this Tribunal in the case of M/s. Kogta Financial (India) Ltd. Vs. CPC (supra) has considered this issue in para 5 to 7 as under: 5. We have heard the rival contentions and perused the material available on record. In case of Mohangarh Engineers and Construction Company vs. DCIT, CPC (Supra), speaking through one of us, we have extensively dealt with the identical matter relating to employee's contribution towards ESI/PF and our findings therein read as under:- 13. We have heard the rival contentions and perused the material available on record. On perusal of the details submitted by the assessee as part of its return of income, it is noted that the assessee has deposited the employees's contribution towards ESI and PF well before the due date of fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he employer's contribution, if paid, prior to due date of filing of return can be claimed by the assessee. In our view, the explanation appended to Section 36(1)(va) of the Act further envisage that the amount actually paid by the assessee on or before the due date admissible at the time of submitting return of the income under Section 139 of the Act in respect of the previous year can be claimed by the assessee for deduction out of their gross total income. It is also clear that Sec. 43B starts with a notwithstanding clause would thus override Sec. 36(1)(va) and if read in isolation Sec. 43B would become obsolete. Accordingly, contention of counsel for the revenue is not tenable for the reason aforesaid that deductions out of the gross income for payment of tax at the time of submission of return under Section 139 is permissible only if the statutory liability of payment of PF or other contribution referred to in Clause (b) are paid within the due date under the respective enactments by the assessees and not under the due date of filing of return. 22. We have already observed that till this provision was brought in as the due amounts on one pretext or the other were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards the delayed deposit of the employees's contribution towards ESI and PF though paid well before the due date of filing of return of income u/s. 139(1) of the Act is hereby directed to be deleted as the same cannot be disallowed under section 43B read with section 36(1)(va) of the Act in view of the binding decisions of the Hon'ble Rajasthan High Court. 6. In the instant case, admittedly and undisputedly, the employees' contribution to ESI and PF collected by the assessee from its employees have been deposited well before the due date of filing of return of income u/s. 139(1) of the Act. Further, the Ld. D/R has referred to the explanation to section 36(1)(va) and section 43B by the Finance Act, 2021 and has also referred to the rationale of the amendment as explained by the Memorandum in the Finance Bill, 2021, however, I find that there are express wordings in the said memorandum which says these amendments will take effect from is April, 2021 and will accordingly apply to assessment year 2021-22 and subsequent assessment years . In the instant case, the impugned assessment year is assessment year 2018-19 and therefore, the said amended provisions cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in favour of the assessee by holding that amendment in Section 36(1)(va) as well as Section 43B of the Act by way of inserting the explanation vide Finance Bill, 2021 are applicable only from A.Y. 2021-22 and subsequent assessment years and therefore, the said amendment is not applicable to the assessment year under consideration. 4.8. Similar view has been taken by the Delhi Benches of the Tribunal in the case of Chatru Mai Garg Vs. ACIT (supra) in para 7 as under: 7. I have heard the rival submissions and perused the materials on record. The issue in the present ground is with respect to disallowance under section 36(1)(va) of the Act. It is an undisputed fact that there has been slight delay in the deposit of employees' contribution of PF and ESI by the assessee and the contribution have been deposited beyond the due date prescribed by the relevant authorities but at the same time it is also a fact that the amounts have been deposited with the appropriate authorities by the assessee before filing the return of income for the relevant assessment year. I find that Hon'ble Delhi High Court in the case of CIT vs. AIMIL Ltd. (supra) has held that no disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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