SREE SAI ROLLER FLOUR MILL PRIVATE LIMITED,HYDERABAD vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE3-(2), HYDERABAD

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ITA 734/HYD/2020Status: DisposedITAT Hyderabad08 October 2021AY 2018-193 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance was not sustainable. This was based on legislative amendments and CBDT clarifications which indicated that the disallowance provisions would apply prospectively from April 1, 2021.

What were the facts?

The assessee challenged a disallowance of Rs. 1,52,684/- made on account of ESI/PF contributions. The disallowance was made because the payments were made after the due date prescribed by the respective statutes, but before the due date for filing the income tax return.

What were the issues?

Whether disallowance of ESI/PF contributions paid after the statutory due date but before the income tax return filing due date is permissible for the assessment year 2018-19, considering subsequent legislative changes.

Which sections of the Income-tax Act were involved?

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

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. : This assessee’s appeal for AY.2018-19 arises from the CIT(A)-3, Hyderabad’s order dated 21-09-2020 passed in case No.10030 / 2020-21 / C / CIT(A)-3, involving proceedings u/s. 154 of the Income Tax Act, 1961 [in short, ‘the Act’]. Heard both the parties. Case file perused.

2.

The assessee’s sole substantive grievance raised in the instant appeal challenges correctness of ESI/PF disallowance of Rs.1,52,684/- made in both the lower proceedings. The assessee’s and Revenue’s pleas before us inter alia 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 only 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 same is deleted therefore. No other ground has been pressed before us.

3.

This assessee’s appeal is allowed in above terms.

Order pronounced in the open court on 8th October, 2021

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