Income Tax Appellate Tribunal - Agra
M/S Luthra Industrial Corporation, ... vs Jurisdictional Assessing Officer ... on 23 November, 2021
IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH: AGRA
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER
AND
DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
LT.A No. 48/AGR/2021
(ASSESSMENT YEAR: 2019-20)
M/s. Luthra Industrial Corporation Vs. | Juridictional Assessinng
Officer Circle -1(1)(1),
B-1, Site-B, Industrial Area
Agra U.P.
Sikandra, Agra U.P. 282007
PAN: AABFL2405P
(Assessee) (Revenue)
Assessee by |Sh. Navin Gargh, Adv.
Revenue by Waseem Arshad, Sr. DR
Date of Hearing 14.10.2021
23.11.2021
Date of Pronouncement
ORDER
PerBench Present appeal was filed by the assessee feeling aggrieved By the order passed by the CIT(A) on 23 June 2021 on the following grounds:-
Because Maven case of in any view, in the Intimation u/s 143(1) dt.10.04.2020, the impugned 1 Disallowance of Rs. 1,85,482/- confirmed by the Ld. CIT(A) (NFAC) (of Employees Contribution to Financial Year itself before due date of filing of Return) is Provident Fund/ E.S.I deposited during the and bad in law grosslyarbitrary, highly unjust, unwarranted, perverse, wrong, illegal LT.A No, 48/AGR/2021 been confirmed by 2the Ld. Because any view, the above impugned Disallowance of Rs. 1,85,482/-has in CTT(A) (NFAC) in summary and prejudice manner, without even considering and refuting the cited in favour of the Judgments including that of Jurisdictional Hon'ble "Allahabad High Court"
Appellant.The impugned Order of Ld. CIT(A), NFAC is perverse.
stands 3- Disallowance of Rs. 1,85,482/-
Because inany view, the issue of impugned recent consolidated Order squarely covered in favour of the Appellant by the very Order Passed dt.14.06.2021 of the Jurisdictional Hon'ble 1TAT Agra Bench, Agra ITAT the Hon'ble Allahabad High Court in Respectfully following the decision of Jurisdictional ITA No.41& matter of M/s Sagun Foundry (P) Ltd. vs CIT (2017) 78 Taxmann 47 vide 2019-20 M/s Mahadev Cold Storage. vs. Assessing 42/Agr/2021 of A.Y.2018-19 and A.Y. of A.Y.2018-19 & 2019-20 Officer, Circle-4(1)(2), Aligarh and ITA No.208& 21/Agr/2021 Vinod Thanwerdas vs. Assessing Officer Ward-1(1)(5), Agra.
had submitted that the
1) At the outset the Ld.AR for the assessee concluded that the amended provision was CIT(A) had wrongly and therefore had wrongly denied the benefit of retrospective in nature It was submitted that the amendment to section 43B to the assessee.
new liability and therefore it was not the provision was creating a prospective nature he relied upon the retrospective rather it was in the matter of M/sMahadev cold decision of the coordinate bench decision ion the matter of storage ITA no 21/agra/2021, Delhi Bench , ITA no 622/Del/2018, Kolkata Bench Indian Geotechnical Services Harendra Nath Biswas ITA no 186/KOL decision in the matter of 2021.
L.T.A No. 48/AGR/2021 passed by the CIT(A) and
2) Per contra the Ld.DR relied upon the order
our attention was drawn to the following paragraphs
it is seen
considered the submission made by the appellant 4.11 have by CPC. As the Employee's that the of income is processed the were paid by return ES1 amounting to Rs. 1,85,482/-
Contribution of PF and section
date" as per the
explanation below
"due
appellant after the back to the total
1 T Act,1961, the same was added
36((1)(va) of the
r.w.s.
of provision of Section 2(24)(x) income of the appellant in the light the auditor in the information given by 36(1)(va) of the Act relying upon the following the provisions of section 143(1 )(a)(iv) Form 3CD. As per made:
adjustment can be or in under section 139, Where a return has been made returnshall be "143. (1) such notice under sub-section (1) of section 142, response to a namely:
-
manner, processed in the following after making the following loss shall be computed the total income or
(a) adjustments, namely:
(i)
(ii). * * * * * * * * *
(iii)... but not taken into
indicated in the Audit Report
disallowance of expenditure
(iv) total income in the return;
account in computing the
as Appellant's
to make such adjustment
shovws that CPC is within the power such payments have
been
This
in the tax audit report that indicated I T Act,1961, auditor himself has in the section 36(1)(va) of the the due date prescribed the Audit Report.
made beyond Income against claimed it in the Return of but Appellant has LT.A No. 48/AGR/2021 4.2 The submission of the appellant in respect of disallowance of employee's contribution is duly considered. However, the same cannot be accepted in view of the amendments made to section 36 and 43B by the Finance Act, 2021. The Finance Act, 2021 has amended section 36, which reads as under-
clause (va), the section 36 of the Income-tax Act, in sub-section (1), in In after Explanationl as Explanation shall be numbered as Explanation 1 thereof and So numbered, the following Explanation shall be inserted, namely:
that the it is hereby clarified Explanation 2.-For the removal of doubts, to have and shall be deemed never provisions of section 438 shall not apply this of determining the "due date" under been applied for the purposes clause;'."
amended section 43, as under- The finance Act, 2021 has also Income-tax Act, after Explanation 4, the following "In section 438 of the Explanation shall be inserted, namely: that the it is hereby clarified
5.-For the removal of doubts, have "Explanation not apply and shall be deemed n e v e r to this section shall provisions of of his employees to sum received by the a s s e s s e e from any been applied to a sub-clause (x) of clause (24) of section 2 applies."
which the provisions of amended section 36 of the Income-tax 4.3 Thus, the Finance Act, 2021, has Sub-section () of the said section provides Act, relating to other deductions. thereof for computing for in the clauses for allowing of deductions provided of the said section 28 of the said Act. 'Clause (va) the income referred to in the allowance of deduction for any sum received by sub-section provides for of sub-clause (x) of his employees to which the provisions a s s e s s e e from any the a s s e s s e e to the section 2 apply, if such sum is credited by of clause (24) of on or before the due date.
account in the relevant fund or funds employee's of this clause, clause provides that for the purposes the said as an employer to Explanation to the a s s e s s e e is required date by which "due date" m e a n s the account in the relevant contribution to the employee's credit an employee's under any issued thereunder or order or notification fund under any Act, rule, or otherwise. By virtue of newly contract of service standing order, award, sub-section (1) of the said section, the clause (va) of inserted Explanation 2 to to have and shall be deemed n e v e r of section 43B shall not apply provisions I.TANo.48/AGR/2021 been applied for the purposes of determining the "due date" under the said clause 4.4 Section 43B of the Income-tax Act relates to allowing certain deductions that any sum only on actual payments. Clause (b) of the said section provides payable by the assessee as an employer by way of contribution to any for fund provident fund superannuation fund or gratuity fund or or any other in the welfare of employees shall be allowed (irrespective of the previous year by incurred the assessee according to Which the liability to pay such sum was the the method of accounting regularlyemployed by him) only in computing is of that previous year, in which such sum income referred to in section 28 that nothing by him. Proviso to the said section provides actually paid relation to any sum which is actually Contained in this section shall apply in in his case for on or before the due date applicable paid by the assessee sub-section (1) of section 139 in respect furnishing the returnof income under as such sum was incurred in which the liability to pay of the previous year furnished by the a s s e s s e e along and the evidence of such payment is the aforesaid insertion of Explanation 5 to this section, virtue of have with such return. By be deemed never to section shall not apply and shall provisions of this a s s e s s e e from any of his employees to received by the been applied to a sum of section 2 applies.4.5 of subclause (x) of clause (24) which the provisions Court judgement in the case of is also made to the Supreme Reference Health Food Pvt. Ltd.
Ahmedabad vs. Gold Coin Commissioner of Income Tax-I, Hon'ble Supreme with a similar issue.
9 SSC 622 wherein while dealing (2018) decision has quoted the following Court in Para 15 ofthe interpretation, 11'h Edn.
2008, Justice G.P. Singh "In Principles of Statutory follows:-
regarding retrospective operation of statutes as has statedthe position to declaratory operation is not applicable The presumption against retrospective Court. For modern As stated in Craies and approved by the Supreme statutes. remove doubts existing be defined as an Act to purposes a declaratory Act may LT.A No. 48/AGR/2021 as to the common law or the meaning or effect of any statute. Such Acts are usually held to be retrospectives. The usual reason for passing a declaratory ACt is to set aside what Parliament deems to have been judicial error, whether in n statement of the common law or in the interpretation of statutes. sua l invariably, such an Act contains a preamble. and also the word 'declared' as we as the word 'enacted'. But the use of the words'it is declared' is not conclusive that the Act is declaratory for these words may, at times, be used to introduc be amending the law new rules of law and the Act in the latter case will only or In determining, therefore, the nature and will not necessarily be retrospective. a new Act to the form. If the Act, regard be had to must be substance rather than unless construed earlier act, it would be without object 1s to explain' an an obvious Act is generally passed to supply retrospective. An explanatory Act. It is well of the previous omission or to clear up doubts as to the meaning law declaratory of the previous curative or merely settled that if a statute is 'shall be deemed intended. The language is prospective operation is generally have included"
deemed n e v e r to 'shall be meant' or of clear words always to have terms retrospective. In the absence construed declaratory, and is in plain would not be so Act is declaratory, it amending amending Act may indicating that the unambiguous. An was clear and Act when theamended provision a provision of the principal of to clear a meaning nature will have be purely clarificatory amendment of this A clarificatory law when which already implicit.
was the principal Act was existing therefore, if be part of the retrospective effect and, the amending Act also will c a m e into force, applicable the constitution retrospective operation is not law.The presumption against nature of the Act, regard existing therefore, the to declatory statutes In determining, Act is "to explain"
If a new
than to the form.
rather
be had to the
substance retrospectively. An
must a unless construed
would be without object or to clear up
an earlier act, it obvious omission
supply an
to
explanatory Act
is generallypassed that if a statute is
Act. It is well settled
of the previous is
doubts as to the meaning lawretrospective operation
of the previous
declaratory to clear a
curative or merely be purely declaratory
Act may
An amending implicit. A
generally intended the principal Act which was already
of
meaning of a provision nature will have
retrospective effect (ibid., pp. amendment of this an obvious clarificatory for the purpose of supplying statute is passed the subsequent 46B-69).Where a a former statute, former statute or to 'explain' The rule omission in a was passed.
to the time when the prior Act statute has relation back I.T.ANo. 48/AGR/2021 against retrospectively is inapplicable to such legislations as these are explanatory and declaratory in nature."- Zile Singh vs. State of Haryana, (2004) 8 SCC 1."4.6 From the wordings above, it is also clear that the above clarificatory amendment brought in by the Finance Act, 2021 appies The in the instant appeal also. The amendment declares 1ssue tnat provisions of section 43B does not apply and deemed to have never been applied for the purpose of determining the due date. Therefore, in view or the above discussions, the sum of Rs 1,85,482/- being the employees Contribution to the PF and ESI, not deposited by the appellant within the cannot be allowed due date as per section 36((1)(va) of the I T Act, 1961, and this ground is dismissed." My of May accordingly, is the Ld.DR that the order passed by the CIT(A)
3) it was submitted by required to be upheld.
the considered the rival contention of the parties and perused
4) We have cited at bar during the material available on record, including the judgments At the outset it may be relevant to course of hearing by both the parties.
we had the the of Mahadev Cold storage mention here that recently in matter section 43B of the act occasion to deal with the issue of disallowance under the subject we had held that the and after elaborate examining the law on is not permissible if the assessee disallowance under section 43B of the act the of contribution before the due date of filing of return had made the I.T.ANo.48/AGR/2021 income. The same principle, continues to hold good for the assessment year in tne ace under consideration as in our opinion the amendment was inserted Bill 2021, much after the assessment year under consideration the Finance the time amount within had provided the consequence of not depositing the disallowance of the is the provided by the act and the consequence the section 43B of as contemplated under Contribution made by the assessee Act. of decision the recent of the bench is duly supported by
5) The above said view of the revenue entire gamut of the argument tribunal wherein the the Kolkata have been thereafter the same considered by the bench and have been the the recent judgement of hereinbelow reproducing rejected. We are 231 & Ltd. I.T.A. Nos.
of Lumino Industries
matter
Kolkata tribunal in the
is as under:-
365/Kol/2021, this regard which
in an
2021 has brought
We note that
the Finance Bill,
both the parties. in PF and ESI
if not
17. Have heard contribution made
disallows the employees' ESI Act). So
a m e n d m e n t which statutes (PF and
by the respective
due date as prescribed Shah takes effect
from
made within the to Shri Miraj D
inserted according
a m e n d m e n t has
been remittance of
after the a s s e s s m e n t year
and if the
and subsequent
by the PF/ESI Act
AY 2021-22
1st April, 2021 i.e the time prescribed
Contribution is not made within
operation.
PF/ESI Employees' is prospective in
deduction which
allowed as a
remittance cannot be nature so,
then the amendment brought
in is clarificatory in
to Ld. CIT(A), the amendment
Whereas according the
this issue whether
So we have to adjudicate
retrospective in operation.
LT.A No. 48/AGR/2021 9brought in by Finance Act, 2021 is prospective or retrospective in operation. We note that before this amendment has been inserted by Finance Bill, 2021, the Hon'ble Jurisdictional Calcutta High Court in the case of Shri Vijayshree Ltd. Ltd.(supra), M/s Philips Carbon Black Ltd.(supra), M/s Coal India Ltd. (supra), M/s Akzo Nobel India Ltd.
hat the payment of employees' contribution if made by an assessee (supra) has held before the due date of filing of return of income u/s 139(1) of the Act, is allowable as a as well deduction. We note that Finance Act, 2021, the provision of Section 36(1)(va) by the Explanation 2 whereby as Section 438 has been amended to this extend by inserting and shall be deemed never it is clarified that the provision of Section 43B shall not apply For date under this clause.
to have been appliedfor the purpose of determining the due under: "Section to Section 36(1)(va) as ready reference, we reproduce the Explanation-2 that the is hereby clarified Explanation-2 For the removal of doubts, it 36(1)(va) deemed never to have been not apply and shall be provisions of Section 43B shall find that We under this clause' 18.
applied for the purpose of determining the 'due date' about the applicability amendment has been brought in the Act to provide certainty this contribution. In order to belated payment of employees' of Section 43B in respect of or not one has to apply amendment brought in later is retrospective test whether the Snowtex Investment Hon'ble Supreme Court in the case of M/s laid by the the test as laid down on this Hon'ble Supreme court took note of the law Ltd. (supra) wherein the of Vatika Township Ltd.
and held that the intent the Constitution Bench in M/s the issue by ascertaining whether need to be looked into for the Parliament/legislature the Hon'ble or not. In Vatika Township Ltd. (supra) should be retrospective amendment Finance Bill will throw clauses appended to the held that the notes on Supreme Court borne in mind that because it has to be legislative intent;
light as to the before an amendment is brought in, aware of three concepts Parliament/legislature is are (i) Clauses" to the Bill which discerned from reading of the "Notes on which can be retrospective amendment amendment with effect from a fixed date; (ii) prospective amendments which are anterior date; and (i) clarificatory with effect from a fixed that the whether the view of Ld CIT(A) nature. So when we adjudicate retrospective in look at the "Notes is retrospective, let us 2 brought in by Finance Act, 2021 to explanation Finance Bill, 2021 (supra) pertaining on Clauses and the relevant clauses 8& 9 of the out the intention of hand which in clear and unambiguous terms spells the issue in therefore will amendment shall take effect from 1st April, 2021 and Parliament that the So since the Assessment Year 2021-22 and subsequent years.
accordingly apply to brought in by Finance Act,2021 onthisissue legislative intentisclear,theamendment erred in holding otherwise. So till AY 2021-22, and Ld. CIT(A) as discussed is prospective view in favor of Court's will hold good and is binding on assessee Jurisdictional High the Court in Bharat Hotels Ltd.
the decision of the Hon'ble Delhi High us. As discussed L.T.A No. 48/AGR/2021 10 stpra nich , as in favor of re venue has not considered the decision of the Co0 ordinate Division bernch decision in M/s Aimil Ltd.(supra) which is in favour of assessee Sc e c t e that fater decision of the Delhi/Hyderabad Tribuna! have foliowed the r i n g assessee in the ight of the Hon'ble Supreme Court decision in M/s Veretatie Preducts (supra in the light of the aforesaid decision and reiying on the ratio thre case cf Vatika Township Pyt. Ltd (supra) and M/s 4eter,ent itd isupra) and also taking note of the binding decision of the Hon'ble Jurisdictional Calcutta High Court on this i5sue before us in Shri Vijayshree Ltd Lta isupra), M/s Philips Carbon Black Ltd (supra), M/s Coal india Ltd isupral, M/s Akzo obe india impugned order of Ld CiT(A) and direct the AO ite (supra), we set aside the esam ci deduction in respect of ernployeescontribution sharestowards ES PF by the assessee before the due date of filing of return u/s 139(1) of the Act. Therefore the appeai of assessee succeeds and so, it is allowed in favor of assessee "
the amendment in the statute is in nature, therefore respectfully Following the decision of the prospective coordinate bench in the matter of Luminous, supra we alow the appeal of the a5e: cee
- - 2J-
(Dr. MITHA LAL MEENA) (LALIEKTMAR) ACCOUVTANT 1EVBER JUDICIALMEMBER CTAppea. sj DR:ITAT True Copy By Order