Income Tax Appellate Tribunal - Hyderabad
Salzgitter Hyderaulics Private ... vs Income Tax Officer, Ward-3(1) , ... on 15 June, 2021
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD 'SMC' BENCH : Hyderabad
(Through Video Conference)
BEFORE SHRI S.S. GODARA, JUDICIAL MEMBER
ITA No. 644/Hyd./2020
Assessment Year: 2019-20
Salzgitter Hydraulics Private Limited vs. ITO, Ward 3(1)
Hyderabad Hyderabad
[PAN: AABCS8228A]
(Appellant) (Respondent)
For Assessee: Shri P. Vinod, AR
For Revenue: Shri N. Srikanth, D.R.
Date of Hearing : 25/03/2021
Date of Pronouncement : 15/06/2021
ORDER
This assessee's appeal for A.Y. 2019-20 arises against the Commissioner of Income Tax (Appeals) "[CIT(A)]"-3, Hyderabad's order dated 11.09.2020 passed in case no. 11120/2019-20 in proceedings u/s 143(1) of the Income Tax Act, 1961 [in short 'the Act'].
Heard both the parties. Case file perused.
Assessee has raised the following substantive grounds in its appeal.
"2. The ld.CIT(A)-3 erred in sustaining the addition on account of employees contribution to PF & ESI without considering that they were paid before the due date of filing the return of income.
3. The ld.CIT(A)-3 erred in holding that the amount paid beyond due date is income without considering the various case laws by various high courts holding that the same is allowable. There is no judgement by Jurisdictional ITA No.644/Hyd/2020 AY 2019-20 Salzgitter Hydraulics Pvt. Ltd. Hyd.
High Court on this issue. However, there are various other High Courts decision in favour of assessee."
2. Coming to the sole substantive issue of ESI/PF disallowance of Rs.1,09,343/- and Rs.3,52,622/-, the assessee's and revenue's stand is that the same has been paid before the due date of filing sec. 139(1) return and after the due date prescribed in the corresponding statutes; respectively. I notice in this factual backdrop that the legislature has not only incorporated necessary amendments in Sections 36(va) as well as 43B vide Finance Act, 2021 to this effect but also the CBDT has issued Memorandum of Explanation that the same applies w.e.f. 1.4.2021 only. It is further not an issue that the forergoing legislative amendments have proposed employers contributions; disallowances u/s 43B as against employee u/s 36 (va) of the Act; respectively. However, keeping in mind the fact that the same has been clarified to be applicable only with prospective effect from 1.4.2021, I hold that the impugned disallowance is not sustainable in view of all these latest developments even if the Revenue's case is supported by the following case law.
(i) CIT vs. Merchem Ltd, [2015] 378 ITR 443(Ker)
(ii) CIT vs. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj.)
(iii) CIT vs. South India Corporation Ltd. (2000) 242 ITR 114 (Ker) (iv.) CIT vs. GTN Textiles Ltd. (2004) 269 ITR 282 (Ker)
(v) CIT vs. Jairam & Sons [2004] 269 ITR 285 (Ker) The impugned ESI/PF disallowance is directed to be deleted therefore.
This assessee's appeal is allowed.
Order pronounced in Open Court on 15th June, 2021.
Sd/-
(S.S. GODARA) JUDICIAL MEMBER Dated: 15th June, 2021 • gmv 2 ITA No.644/Hyd/2020 AY 2019-20 Salzgitter Hydraulics Pvt. Ltd. Hyd.
Copy of Order forwarded to:
1. Salzgitter Hydraulics Private Ltd., # 59-B, CIE, Gandhi Nagar extension, Balanagar, Hyderabad
2. ITO, Ward 3(1), Hyderabad
3. ACIT, Range 3, Hyderabad
4. Dy.DIT, CPC, Bengaluru
5. CIT(A)-3, Hyderabad.
6. Pr.CIT -3, Hyderabad
7. D.R. ITAT Hyderabad
8. Guard File 3