TMI Blog2022 (11) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... rge K, JM And Shri Laxmi Prasad Sahu, AM For the Appellant : Sri.Rajgopal, AR For the Respondent : Sri.K.R.Narayana, Addl.CIT-DR ORDER PER GEORGE GEORGE K, JM : This appeal at the instance of the assessee is directed against CIT(A) s order dated 28.07.2021. The relevant assessment year is 2018-2019. 2. The grounds raised read as follows:- 1. The impugned order passed by the learned Commissioner of Income Tax (Appeals) under section 250 of the Income Tax Act, 1961 to the extent which is against the Appellant is opposed to law, without jurisdiction, weight of evidence, probabilities, facts and circumstances of the case. 2. The intimation of the learned assessing officer in so far it is prejudicial to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and is applicable to the AY 2021-22 onwards and hence not applicable to the current AY 2018-19, such amendment was substantive in nature and not formed part of statute books of the current FY 2017-18, application of law retrospectively is bad in law. 8. The Appellant submits that each of the above grounds are mutually exclusive and without prejudice to one another. 9. The Appellant craves leave to add, alter, amend, vary, omit or substitute any of the aforesaid grounds of objection at any time before or at the time of hearing before the Honourable Income Tax Appellate Tribunal ('Tribunal'), so as to enable the Hon'ble Tribunal to decide on the appeal in accordance with the law. For these and other grounds that may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that only employers contribution to PF and ESI is entitled to deduction u/s 43B of the I.T.Act, if the same is paid prior to due date of filing of return of income u/s 139(1) of the Act. It was further held that the amendment to section 36(1)(va) and 43B of the I.T.Act by Finance Act, 2021 is clarificatory and has got retrospective operation. 5. Aggrieved, assessee has filed this appeal before the Tribunal. The learned AR submitted that the payment of employees contribution to PF ESI though belated, but was before the due date of fling the return of income u/s. 139(1) of the I.T.Act and otherwise allowable u/s. 43B of the I.T.Act. 6. The learned Departmental Represent, on the other hand, brought to our attention the latest decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced the amendments in 1988-89, inserting Section 36(1)(va) and simultaneously inserting the second proviso of Section 43B, its intention was not to treat the disparate nature of the amounts, similarly. As discussed previously, the memorandum introducing the Finance Bill clearly stated that the provisions especially second proviso to Section 43B - was introduced to ensure timely payments were made by the employer to the concerned fund (EPF, ESI, etc.) and avoid the mischief of employers retaining amounts for long periods. That Parliament intended to retain the separate character of these two amounts, is evident from the use of different language. Section 2(24)(x) too, deems amount received from the employees (whether the amount is rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given. To pass muster, actual payments were a necessary pre-condition for allowing the expenditure. 53. The distinction between an employer s contribution which is its primary liability under law in terms of Section 36(1)(iv), and its liability to deposit amounts received by it or deducted by it (Section 36(1)(va)) is, thus crucial. The former forms part of the employers income, and the later retains its character as an income (albeit deemed), by virtue of Section 2(24)(x) - unless the conditions spelt by Explanation to Section 36(1)(va) are satisfied i.e., depositing such amount received or deducted from the employee on or before the due date. In other words, there is a marked distinction between the nature and character of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he form of statutory pay out. They are others income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. It is upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such interpretation were to be adopted, the non-obstante clause under Section 43B or anything contained in that provision would not absolve the assessee from its liability to de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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