Income Tax Appellate Tribunal - Chandigarh
Sh. Manjeet Singh Kalra, Panchkula vs Adit,Cpc/ Ito-Ward-1, Panchkula on 2 November, 2021
ए" च डीगढ़
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "ए
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH
BENCH "A" CHANDIGARH
ीमती दवा संह, याियक सद य एवं ीमती अ पूणा गु ा,
ा लेखा सद य
BEFORE: SMT. DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, AM
आयकर अपील सं./ ITA No. 260/Chd/2021
नधा रण वष / Assessment Year : 2018-19
Sh.Manjeet Singh Kalra, बनाम The I.T.O.,
461 P, Sector 26, Ward-1,
VS
Panchkula. Panchkula.
थायी लेखा सं./PAN No: AEAPK2788P
अपीलाथ /Appellant यथ /Respondent
नधा रती क! ओर से/Assessee by : Shri Neeraj Jain, CA
राज व क! ओर से/ Revenue by : Shri Ashok Khanna, Addl.CIT
सन
ु वाई क! तार&ख/Date of Hearing : 02.11.2021
उदघोषणा क! तार&ख/Date of Pronouncement : .11.2021
Hearing conducted via Webex
आदे श/ORDER
Per Anna pur na Gupt a, Account ant Mem ber:
Th e p re se n t a p pe a l h a s bee n fi led by th e a sse s see a g a in st th e o rde r of the C om mis si on e r of I nc ome Ta x , N a tio na l F a ce le ss Ap p e a l Ce nt re , De lh i , ( i n s hor t r e fe r re d to a s C I T(A ) d a te d 0 2 .0 8 .2 0 2 1 r e l a ti n g to A. Y. 20 1 8 -1 9 , p a sse d u /s 2 50 ( 6 ) of t he I n co me Ta x Ac t, 1 9 6 1 (h e re in a fte r re fe rre d to a s "Ac t") .
ITA -260/CHD/2021 A.Y. 2018-19 Page 2 of 5
2. Th e sol i ta r y is sue i n the p re se nt a p p e a l re l a te s to t he a d d it ion ma de to the i n come of th e a sse ssee i n th e i nti ma ti on ma d e u /s 14 3 ( 1) o f t he Ac t, b y d i sa l lo wi n g d e l a ye d p a yme n ts of e mp l oye e s con tr i bu ti on to ESI and PF a mou nti n g to Rs .1 1 ,3 7 ,6 2 0 /- b y i nv oki n g t he p rovi si on s of se c ti on 3 6 (l ) (v a ) of th e Ac t.
3. Th e Ld .C I T(A ) u p h e l d the a d d it ion r e ly in g up on va r i ous d e c is ion s of the ITA T a n d H on'b l e H i gh C ou rt s a n d a l so o n t he b a si s of the a men d me nt e ffe cte d b y th e F in a nce Ac t, 2 02 1 , to se cti on 43 B of the Act by i n se r ti on of E xpl a n a ti on-5 a n d to se cti on 3 6 ( l) ( va ) of th e A ct b y in se r tio n of E xp la na ti on -2, b oth to the e f fe ct tha t du e d a te f or p a yme n t of e mp l oye e s' co ntr i b uti on to E SI a nd PF, for th e p u r po se of c la i mi ng d e d uc ti on of t he sa i d a mou n t a s p e r the p r ovi si ons o f se c ti on 3 6 (l ) (v a ) of the A ct w a s n ot g ove r n e d b y se c ti on 43B sti p ul a ti ng th e d ue d a te to b e til l the f il i ng of re tur n of i nc ome u /s 1 3 9 (1 ) of th e Ac t, me a nin g th e re b y the emp l oye e s' c ontr ib ut ion to E SI a n d PF w a s to b e p a i d b y d ue d ate s pe ci f ie d in the i r re spe cti ve Ac ts f or the p u rp os e of c la i mi ng d e d u cti on t he re of. The Ld .C I T(A ) h e l d th a t th e sa i d a me nd me n t to b e c la ri f ic a tor y a n d h e nce re tr ospe cti ve in a p p l ic a ti on. Accordingly, the contention of the Ld.Counsel for the assessee that the issue already stood ITA -260/CHD/2021 A.Y. 2018-19 Page 3 of 5 decided in its favour by the Hon'ble Jurisdictional High Court in the case of CI T vs Rai Agro Industries(2011) 334 I TR 122(P&H) & CI T vs Hemla Embroidery Mills (P) Ltd(2014) 366 ITR 167(P&H), was brushed aside and the addition upheld.
4. Th is i ss ue , we a r e a w a re , s tan ds a dj ud i ca t e d by the co or di n a te be nch of the I TA T i n v a r io us a p pe a ls, con si ste nt ly d e le ti n g the d isa l low a n ce . I n th e c a se o f A jay Pi p l a ni Vs As si sta nt Di r e ctor of I n come Ta x, C P C , B e ng a lur u i n I TA N o. 1 1 4/C HD /2 0 21 o rd e r d a te d 0 4 .10 . 2 02 1 , th e i ss ue h a s be e n a d j ud ic a te d a t par a 5 to 7 o f the ord e r a s un de r :
5. We have heard both the parties. It is not denied that the employees contribution to ESI and PF was allowable and claimed as deduction by the assessee on the strength of various decisions of the jurisdictional High Court holding contributions deposited by the due date of filing of return of income u/s 139(1) of the Act as allowable. The Revenue has disallowed the same in the impugned year by applying the amendment made by Finance Act 2021 to section 36(l)(va) and 43B of the Act allowing the claim of such deduction only when paid by due dates specified in their respective Acts, holding the amendment to be applicable on all pending cases post the amendment.
6. We have gone through the orders of the coordinate Benches of the ITAT cited by the Ld.Counsel for the assessee before us and have noted that it has been consistently held that the amendment to section 36(l)(va) and u/s 43B of the Act effected by the Finance Act 2021 is applicable prospectively ,reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, specifically stating the amendment being applicable in relation to assessment year 2021-22 ITA -260/CHD/2021 A.Y. 2018-19 Page 4 of 5 and subsequent years. Therefore the addition, we hold, cannot be made on the strength of the amendment effected by Finance Act 2021 to section 36(l)(va)/43B of the Act. Moreover it is an admitted position that the jurisdictional High Court has in various decisions held that employees contribution to ESI & PF is allowable if paid by the due date of filing return of income u/s 139(1) of the Act. The jurisdictional High Court has held so in the following cases:
1) CIT Vs. Nuchem Limited, ITA No.323 of 2009
2) CIT Vs. Hernia Embroidery Mills Pvt. Ltd.(2014), 366 ITR 167
7. In view of the above, we hold that the claim of employees contribution to ESI and PF as per section 36(l)(va) of the Act cannot be denied in the impugned year, i.e. 2019-20 on the basis of amendment made to the section by Finance Act 2021. The order of the Ld.CIT(A) upholding the said disallowance to the tune of Rs. 18,21,088/-
is therefore set aside and the AO is directed to allow the claim of the assessee."
5. I de nti ca l d i sa ll ow a nc e was d e le te d by the I TA T, C h a nd i ga r h i n th e ca se of M/s Ju p ite r A q ua Li ne s Pv t. Ltd vs D C I T, C i r cl e 6 (1 ) Mo ha l i i n I TA N o. 8 3/C h d /2 02 1 d a te d 2 7 t h Au gu st 2 02 1 .
6. Si nc e the i ssu e inv ol ve d i n th e pr e se n t a ppe a l ad mi tte d l y is i de nti ca l , re la t in g to th e d is a l low a n ce of e mp l oyee s' co ntr i b uti on t o E SI a n d PF ma d e a s pe r the a mend me nt ma d e to Se cti on 3 6 ( 1) (va ) of the A ct by th e F in a nce Act , 2 02 1 , th oug h a d mi tte d l y th e amoun ts sto od p a i d b e f ore the d ue d a te of fi l in g of re tur n of i n come , th e fa cts a r e id e n ti ca l to th at i n th e ca se ITA -260/CHD/2021 A.Y. 2018-19 Page 5 of 5 of A j a y Pi p l a ni (s up r a ) a n d t he i ss ue , the re f ore, i s s q ua r e ly co ve re d b y th e a for e s a i d de c is ion. F ol low i ng t h e sa me , the d is a l low a n ce ma de of ESI /P F e mpl oy ee s ' con tr i bu ti on u/s 3 6 (1 ) (v a ) a mou nt i n g t o R s. 1 1 ,3 7 ,6 2 0 / i s d e l e te d.
7. I n the re su lt , a ppe a l of the a sse ssee i s a l lowe d.
O r de r p r on oun ce d on ... ...... 1 1. 2 0 21 .
( दवा संह ) ( अ पूणा गु ा ) (DIVA SINGH) (ANNAPURNA GUPTA) याियक सद य/ Judicial Member लेखा सद य/ Accountant Member *रती*
आदेश क ितिलिप अ ेिषत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु / CIT
4. आयकर आयु (अपील)/ The CIT(A)
5. िवभागीय ितिनिध, आयकर अपीलीय आिधकरण, च डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar
1. Draft dictated 02.11.2021 Sr.PS
2. Draft first placed before author 02.11.2021
3. Approved draft comes to Sr.PS/PS 4 Final draft placed before author
5. Order signed and pronounced on 6 File sent to the Bench Clerk Sr.PS
7. Date on which file goes to the AR
8. Date on which file goes to the Head Clerk.
9. Date of dispatch of Order