TMI Blog2022 (9) TMI 344X X X X Extracts X X X X X X X X Extracts X X X X ..... ectfully follow the same. We, thus, in terms of our aforesaid observations set-aside the order of the CIT(Appeals) and direct the AO to vacate the disallowance. - ITA No. 105/RPR/2022 - - - Dated:- 29-8-2022 - Shri Ravish Sood, Judicial Member For the Assessee : None (Written submission) For the Revenue : Shri G.N Singh, Sr. DR ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 18.11.2021, which in turn arises from the orders passed by the A.O under Sec. 154 of the Income-tax Act, 1961 (in short the Act ) dated 28.11.2019 for the assessment year 2018-19. Before us the assessee has assailed the impugned order on the following grounds of appeal: 1. That the Learned Commissioner of Income Tax (Appeals) NFAC vide its order u/s.250 of the Income Tax Act, 1961 ( Act ) dated 18.11.2021 erred on facts and in law in confirming the adjustment/disallowance made in intimation u/s.143(1) dated 28/11/2019 passed by CPC Bangalore of Rs.10,02,073/- u/s.36(1)(va) of the Act on account of alleged delayed payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contributions towards Provident fund (PF) and Employee s State Insurance (ESI) by the assessee. 4. Assessee holding a conviction that the aforesaid adjustment made by the A.O to its returned income was a mistake that was amenable for rectification, thus, filed an application u/s.154 of the Act, which, however, was rejected by the A.O vide his order dated 28.11.2019. 5. Aggrieved, the assessee assailed the order passed by the A.O u/s.154 of the Act before the Commissioner of Income-Tax (Appeals) but without any success. 6. The assessee being aggrieved with the order of the Commissioner of Income-Tax (Appeals) has carried the matter in appeal before us. As the assessee appellant despite having been intimated about the hearing of appeal had failed to put up an appearance before us, therefore, we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules, 1963, i.e, after hearing the respondent revenue and perusing the orders of the lower authorities. 7. We have heard the ld. DR, perused the orders of the lower authorities and the material available on record, as well as considered the written submissions a/w. judicial pronoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn of income for the year under consideration, therefore, the same were allowable as a deduction u/s.43B of the Act. It was submitted by the Ld. AR that the lower authorities had misconceived the settled position of law and disallowed the aforementioned amounts, despite the fact that the same had been deposited prior to due date of filing of the return of income by the assessee company. 10. In order to answer the issue as to whether or not the employees contribution to welfare funds falls within the scope and domain of Sec. 43B of the Act, we may herein draw support from the judgment of the Hon ble High Court of Bombay in the case of CIT Vs. Hindustan Organic Chemicals Ltd in ITA No. 399/12, dated 11.07.2014. In the said case, the Hon ble High Court of Bombay was, inter alia, called upon to answer the following substantial question of law that was raised in the appeal filed by the revenue:- (A). Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal, in law, was right in allowing the claim of the Assessee on account of delayed payments of P.F. Of employees' contribution amounting to Rs.1,82,77,138/- by relying on the decision of the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s aforesaid order are culled out as under:- 5.1 We may observe that the ld. CIT(A) in its order at para no. 7.15 itself has observed that the issue has been highly contentious and different High Courts have taken divergent views on the same issue, out of which some are in favour of the assessee and some are against the assessee. The ld. CIT(A) further observed that the judgments and orders relied upon by the assessee have been rendered before the clarificatory amendments made in the Finance Act, 2021 and the Finance Act, 2021 has put an end to this controversy. 5.2 Admittedly there is plethora of judgments in favour of the Assessee s contention and of the Revenue. The controversy with regard to divergent views of different High Courts, has been settled by the Hon'ble Apex Court in the case of CIT Vs. M/s. Vegetables Products Ltd. (88 ITR 192) by laying the dictum that if two reasonable constructions of a taxing provision are possible that construction which favours the Assessee must be adopted. The Hon ble jurisdictional High Court in the case of CIT Vs. M/s Hemla Embroidery Mills (P) Ltd. (366 ITR 167) (P H HC) and in the case of CIT Vs. M/s Mark Auto Industries Ltd. (3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of our aforesaid deliberations, we are of the considered view, that as the amendments made available on the statue vide the Finance Act, 2021 i.e Explanation 5 to Section 43B and Explanation 2 to Section 36(1)(va) are applicable w.e.f 01.04.2021, i.e, from A.Y 2021-22 onwards, therefore, the same would not have any bearing on the case of the assessee before us, i.e, for A.Y 2011- 12. Accordingly, drawing support from the aforementioned judicial pronouncements, we, herein conclude, that as the employees contributions to PF and ESI of Rs.2,88,976/-was deposited by the assessee before the due date of filing of its return of income for the year under consideration, therefore, the same being saved by the provisions of Sec. 43B of the Act could not have been disallowed by the A.O. We, thus, in the backdrop of our aforesaid deliberations set-aside the order of the CIT(A) and vacate the disallowance of Rs.2,88,976/- made by the A.O. Thus, the Ground of appeal No. 1 is allowed in terms of our aforesaid observations. As the facts and the issue involved in the aforesaid order of the Tribunal in the case of Ind Synergy Lyd. (supra) remains the same as are there before us in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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