TMI Blog2022 (8) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the payments were made prior to the due date of filing of the return of income u/s 139(1). As the amended provisions of section 43B as well as 36(1)(va) of the I.T.Act are not applicable for the assessment years under consideration. By following the binding decision of the Hon ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT (supra), the employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the I.T.Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee - ITA No.528/Bang/2022 - - - Dated:- 2-8-2022 - Shri George George K , JM And Ms. Padmavathy S , AM Appellant by : Sri.Sairam, CA Respondent by : Sm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in the respective Acts but before the due date of filing return of income by relying on newly inserted Explanation 5 to section 43B by Finance Act 2021. 5. The learned Commissioner of Income Tax [Appeals] failed to appreciate that the Explanation 2 to section 36(1)(va) and Explanation 5 to Section43B of the Act was inserted by Finance act 2021 and the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only prospectively from 01.04.2021. 6. The learned Commissioner of Income Tax (Appeals) has failed to appreciate the decision of the Jurisdictional Hon'ble High court of Karnataka in case of Essae Teraoka Private limited vs DCIT in ITA No 480/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reasons for the difference between the returned income and the assessed income u/s 143(1) of the I.T.Act was on account of disallowance of sum of Rs.1,14,685 being late remittance of employees contribution to PF and ESI under the respective Acts. 4. Aggrieved by the intimation u/s 143(1) of the I.T.Act, the assessee preferred an appeal before the first appellate authority. It was stated that the assessee had paid the employees contribution to PF and ESI prior to the due date of filing of the return u/s 139(1) of the I.T.Act. Therefore, it was submitted that the assessee is entitled to deduction of employees contribution to PF and ESI having regard to the provisions of section 43B of the I.T.Act. In this context, the assessee relied o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of filing of the return of income u/s 139(1) of the I.T.Act. It was further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. The relevant finding of the ITAT in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT (supra), reads as follows: 7. We have heard rival submissions and perused the material on record. Admittedly, the assessee has remitted the employees' contribution to ESI before the due date for filing of return u/s 139(1) of the I.T.Act. The Hon'ble jurisdictional High Court in the case of Essae Teraoka (P.) Ltd. v. DCIT reported in 366 ITR 408 (Kar.) has categorically held that the assessee would be entitled to deduction of employees' con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 liable to pay tax on the said amount treating that as his income, deserves to be rejected. 22. With respect, we find it difficult to endorse the view taken by the Gujarat High Court. WE agree with the view taken by this Court in W.A.No.4077/2013. 23. In the result, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 43B of the Actby Finance Act, 2021 is only prospective in nature and not retrospective. (i) Dhabriya Polywood Limited v. ACIT reported in (2021) 63 CCH 0030 Jaipur Trib. (ii) NCC Limited v. ACIT reported in (2021) 63 CCH 0060 Hyd Tribunal. (iii) Indian Geotechnical Services v. ACIT in ITA No.622/Del/ 2018 (order dated 27.08.2021). (iv) M/s.Jana Urban Services for Transformation Private Limited v. DCIT in ITA No.307/Bang/2021 (order dated 11th October, 2021) 7.3 In view of the aforesaid reasoning and the judicial pronouncements cited supra, the amendment by Finance Act, 2021 to Sec.36[1][va] and 43B of the Act will not have application to relevant assessment year, namely A.Y. 2019- 2020. Accordingly, we dir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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