TMI Blog2022 (10) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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. 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 [ 2014 (3) TMI 386 - KARNATAKA HIGH COURT] the employees contribution paid by the assessee before the due date of filing of return of income u/s 139(1) of the Act is an allowable deduction. Accordingly, we decide this issue in favour of the assessee and the disallowance made by the Assessing Officer is deleted. App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in not following the judgements of jurisdictional tribunal which held that the amendment brought in by Finance Act 2021 w.r.t. remittance of employees' contribution to PF is applicable from AY 2021-22 and not retrospectively. 3. The brief facts of the case are that the assessee company is a wholly owned subsidiary of Zynga Inc., USA. The assessee is engaged in providing software development and other IT enabled services to its parent company. The assessee filed it return of income for the relevant assessment year on 14.02.2021 declaring an income of Rs.36,54,89,850/-. The return was processed by the CPC under Section 143(1) of the Income Tax Act, 1961 (the Act) and disallowance of Rs.46,29,132/- was made on account of delayed re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi Company Vs. DCIT (supra) by following the dictum laid down by the Hon ble jurisdictional High Court in the case of EssaeTeraokaPvt. Ltd Vs. DCIT (supra) had held that the assessee would be entitled to deduction of employees contribution to PF and ESI provided that the payments were made prior to the due 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. ShakuntalaAgarbathi 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 employee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct within fifteen days of the closure of every month pay. It is clear that the word contribution used in Clause (b) of Section 43B of the IT Act means the contribution of the employer and the employee. That being so, if the contribution is made on or before the due date for furnishing the return of income under subsection (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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endment cannot be held to be retrospective in nature. Even otherwise, the amendment has been mentioned to be effective from 01.04.2021 and will apply for and from assessment year 2021-2022 onwards. The following orders of the Tribunal had categorically held that the amendment to section 36[1][va] and 43B of the Actby Finance Act, 2021 is only prospective in nature and not retrospective. (i) DhabriyaPolywood 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/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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