SRI NAVDURGA TEXTILE PROCCESSORS PRIVATE LIMITED,HYDERABAD vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(2), HYDERABAD

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ITA 714/HYD/2020Status: DisposedITAT Hyderabad22 October 2021AY 2018-193 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the disallowance of ESI/PF contributions was not sustainable due to recent legislative amendments and CBDT clarifications applying prospectively from April 1, 2021. The issue of short credit of TDS was restored to the assessing authority for verification.

What were the facts?

The assessee filed appeals against disallowances of ESI/PF contributions and short credit of TDS. The disallowances were made for payments made after the due date of filing the return but before the corresponding statutory due dates.

What were the issues?

Whether ESI/PF contributions paid after the due date of filing the return but before the statutory due date are allowable deductions. Whether short credit of TDS requires verification by the assessing authority.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

PER S.S.GODARA, J.M. : These assessee’s two appeals for AYs.2018-19 & 2019-20 arise from the CIT(A)-3, Hyderabad’s order dated 21-09-2020 passed in case Nos.10006 & 10032 / 2020-21 / C / CIT(A)-3, involving proceedings u/s. 143(1) of the Income Tax Act, 1961 [in short, ‘the Act’]; respectively. Heard both the parties. Case files perused.

2.

It transpires at the outset that the assessee’s instant two appeals suffer from 03 days delay stated to be attributable to the reason(s) beyond its control as per condonation petition/affidavit. No rebuttal has come from the departmental side. The impugned delay is condoned therefore.

3.

Coming to the former substantive issue raised herein of ESI/PF disallowance of Rs.71,242/- and Rs.2,57,522/- assessment year-wise; respectively made in both the lower

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proceedings, the assessee’s and Revenue’s pleas before us are 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 statute(s); respectively. We notice in this factual backdrop that the legislature has not only incorporated necessary amendment in Sections 36(1)(va) as well as u/s. 43B vide Finance Act, 2021 to this effect but also the CBDT has issued Memorandum of Explanation that the same applies w.e.f. 01-04-2021 only. It is further not an issue that the foregoing legislative amendments have proposed employers’ contribution/disallowance u/s.43B as against employee’s contribution u/s.36(va) of the Act; respectively. However, keeping in mind the fact that the same has been clarified to be applicable with prospective effect from 01-04-2021 only, we hold that the impugned disallowance is not sustainable in view of all these latest developments. The impugned ESI/PF disallowance is deleted in both these assessment years therefore. The assessee’s identical latter ground of short credit of TDS credit of Rs.88,926/- and Rs.88,099/-; respectively is restored to the assessing authority for necessary verification.

4.

No other ground has been pressed before us.

5.

These two assessee’s appeals are allowed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open court on 22nd October, 2021 (LAXMI PRASAD SAHU) JUDICIAL MEMBER Hyderabad, Dated: 22-10-2021 TNMM

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Copy to : 1.Sri Navdurga Textile Processors Pvt. Limited, 21-1- 727/728, Shop No.208/A, B.G.Market, Rikab Gunj, Hyderabad. 2.The Deputy Commissioner of Income Tax, Circle-3(2), Hyderabad. 3.CIT(Appeals)-3, Hyderabad. 4.Pr.CIT-1, Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.

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