Income Tax Appellate Tribunal - Chandigarh
M/S Amit Engineers, Baddi vs Dcit,Circle, Parwanoo on 22 December, 2021
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "ए", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH 'A' , CHANDIGARH
ीमती अ नपण
ू ा गु ता, लेखा सद"य एवं ी एन.के. चौधर , याय)क सद"य
BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER
आयकर अपील सं./ ITA No.231/Chd/2021
नधा रण वष / Assessment Year : 2018-19
M/s Amit Engineers, Village Judi बनाम The D.C.I.T.,
Kalan, Baddii, District Solan, Himachal CPC, Bangalore &
Pradesh. Jurisdictional AO - DCIT,
Circle Parwanoo, Himachal
Pradesh.
थायी लेखा सं./PAN NO: AAKFA5620L
अपीलाथ /Appellant यथ /Respondent
नधा रती क ओर से/Assessee by : Shri B.M. Monga, Adv. &
Shri Rohit Kaura, Adv.
राज व क ओर से/ Revenue by : Dr.Ranjit Kaur, Sr.DR
सन
ु वाई क तार%ख/Date of Hearing : 17.11.2021
उदघोषणा क तार%ख/Date of Pronouncement: 22.12.2021
(Hearing through Webex)
आदे श/ORDER
Per Annapurna Gupta, Accountant Member:
The p r e se nt a p pe a l has bee n fi le d by t he a ss e ssee a ga i nst the or de r of the C ommi ssi on e r of I ncome Ta x (A pp e a ls ), N a tio na l F a ce le ss A ppe a l C e n tre (N FA C ), De lh i , (i n sho rt r e fe r re d to a s C I T(A ) d a te d 2 6 .0 8 . 20 2 1 r e l a ting to A .Y . 2 ITA No.231/Chd/2021
A.Y. 2018-19 Page 2 of 5 20 1 8 - 1 9 , p a sse d u /s 2 5 0( 6 ) of t he I n come Ta x Ac t,1 9 6 1 (h e re i n a fte r re fe rr e d to a s "Ac t").
2. Th e sol it a ry i ss ue i n the p re se nt a p p e a l re l a te s to t he a dd i ti on ma d e to the i n come of t he a s se s se e in t he in ti ma ti on ma de u/s 1 4 3 (1 ) of th e A ct, by dis a ll ow i ng de la ye d p a yme nts o f e mp lo yee s con tr ib u tio n to ESI a n d P F a moun ti ng to R s. 5 , 3 9, 4 4 6 /- b y i n vok i ng th e p rov is ion s of se c tio n 3 6( l )( va ) of th e Act .
3. Th e Ld .C I T(A ) up he ld the a dd i ti on r e l yin g u p on va ri ous de ci si ons of t he I TA T a n d Hon 'b l e H igh C ou r ts an d a ls o on the b a s is of the a me n dme nt e f fe cte d b y the F in a n ce Ac t, 20 2 1 , to se c ti on 4 3 B of the A ct b y i n se r ti on of Exp la na ti on -5 a nd to se cti on 3 6 ( l) ( va ) of th e Ac t by in se rt ion of Exp la n a ti on -2, b oth to th e e f fe ct th a t d ue da te fo r p a yme nt of e mp loy ee s ' contr i b uti on to E SI a n d PF , for t he p ur p ose of cl a imi n g d e d uc ti on of t he sa i d amoun t a s p e r th e pr ov is io ns of se c ti on 36 ( l )( va ) o f t he Ac t w a s n ot g ove r n e d b y se cti on 43 B s ti pu l a tin g the d ue da te to b e ti l l the fi l in g o f r e tur n of in come u/s 1 3 9 (1 ) of the Act, me a ni n g ther e b y the e mp loy ee s ' c ont r ib u tio n to E SI a n d P F w a s t o b e p a id b y d ue da t e spe c if ie d in th e i r re spe c tive Ac ts f or t he p u rp os e of cl a imi n g d e d uc ti on t he re of. Th e Ld .C I T(A ) he ld th a t t he sa id 3 ITA No.231/Chd/2021 A.Y. 2018-19 Page 3 of 5 a me nd me nt to b e cl a ri f ic a tor y and he nce re tr ospe cti ve in a pp l ic a ti on. Accordingly, the contention of the Ld.Counsel for the assessee tha t the issue already stood decided in its favour by the Hon'ble Jurisdictional High Court in the case of CI T vs. Rai Agro Industries(2011) 334 ITR 122(P&H) & CIT vs Hemla Embroidery Mills (P) Ltd(2014) 366 I TR 167(P&H), was brushed aside and the addition upheld.
4. Th i s i ssu e h a s b e e n de a l t w ith a nd a d j ud i ca te d b y th e I TA T in a nu mb e r of ca s e s, c onsis te n tl y ru l in g i n fa v our of the a sse ssee , h oldi n g th a t th e a me nd me n t t o se ction 4 3B of the A ct by i nse r tion of E xp la n a ti on -5 a nd to se c ti on 3 6 (l ) (v a ) of th e Ac t b y in se r ti on of Exp la na ti on -2 ,b y th e F in a n ce A ct 20 2 1 is pr os p e ctiv e a nd the i ss ue o the r wi se sta nd s d e c ide d by th e j u ri sd i ct ion a l h igh c our t in f a vou r of th e as se ssee . I n the ca se of Aj a y P ip l a ni Vs As si sta n t Di r e c tor of I nc ome Ta x, C PC , B e n ga l ur u in I TA No. 1 1 4 /C H D /20 2 1 order d a te d 04 . 10 . 2 02 1 th e is su e h a s be e n a dju d ic a te d a t p a ra 5 to 7 of the or de 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 4 ITA No.231/Chd/2021 A.Y. 2018-19 Page 4 of 5 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 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." O n si mil a r l in e s the i ssue h a s be e n a d ju d ic a te d in fa vo ur of th e a sse sse e in the ca se of M/s . Ju p i te r Aq ua Lin e s P vt. Ltd vs DC I T, C i r cl e 6( 1 ) Moh a l i in I TA N o.8 3 /C h d /2 0 2 1 d a te d 2 7 t h Au gus t 2 0 2 1 .
5. In vie w of the a for e sta te d de ci si on s of th e I TA T, the re fo re t he c ont e n tio n of the Ld .D R b e f or e us t hat the a me nd me nt to s ect ion 3 6 (1 ) ( va ) of th e A ct is re tr osp e cti ve is di smi ss e d . A ls o s in ce n o fa c ts d i sti ng ui sh in g th e pre se n t ca se s f r om th ose d e ci de d b y the I TA T ha v e be e n poin te d o ut 5 ITA No.231/Chd/2021 A.Y. 2018-19 Page 5 of 5 by th e Ld .D R b e fore u s a n d a d mi tte d l y the a mou nt s of e mp loy ee s ' c ontr ib uti on to ESI a nd PF s tood p a i d b e fo re the du e d a te of fi lin g of r e tur n of i nc ome , the i s sue of di sa l l ow a nc e on a c cou nt of de la ye d p a y me nt s o f emp l oye e s' con tr ib u tio n to ES I a n d P F i s s q ua r e l y co ve re d b y the a for e s a i d de ci si ons , fol l ow in g w h ic h th e d i sa l l ow anc e ma d e of ES I /P F e mp l o yee s' con tr i b uti on u /s 3 6 ( 1 )( va ) a mo un ti ng to R s. 5, 3 9 ,4 4 6/- is d e le te d .
6. I n the re s ul t, the a p p e a l of t he a sse s se e i s a l lo we d.
O r de r p r o n o u n ce d i n o p e n c o u r t a t th e co n c l u si o n o f h e a r i n g on 2 2 /1 2 / 2 0 2 1 .
Sd/- Sd/-
एन.के. चौधर अ नपणू ा ग ु ता
(N.K. CHOUDHRY ) (ANNAPURNA GUPTA)
याय)क सद"य/Judicial Member लेखा सद"य/Accountant Member
+दनांक /Dated: 22/12/2021
*रती*
आदे श क त+ल,प अ-े,षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु.त/ CIT
4. आयकर आयु.त (अपील)/ The CIT(A)
5. ,वभागीय त न1ध, आयकर अपील%य आ1धकरण, च3डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानस ु ार/ By order, सहायक पंजीकार/ Assistant Registrar