ASST. COMMISSIONER OF INCOME TAX, CIRCLE-8(1), HYDERABAD vs. DELOITTE AND TOUCHE ASSURANCE AND ENTERPRISES RISK SERVICES INDIA PRIVATE LIMITED, HYDERABAD

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ITA 503/HYD/2020Status: DisposedITAT Hyderabad21 September 2021AY 2018-193 pages

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

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the disallowance was rightly deleted by the CIT(A) considering the legislative amendments and CBDT's clarification that they are applicable only from April 1, 2021. The amendments distinguish between employer's and employee's contributions.

What were the facts?

The assessee claimed a deduction for ESI/PF payments made after the due date prescribed by the respective statutes but before the due date for filing the return under Section 139(1). The CIT(A) deleted the disallowance made by the Assessing Officer.

What were the issues?

Whether ESI/PF contributions paid after the statutory due date but before the return filing due date are allowable as a deduction. The applicability of recent legislative amendments to the assessment year in question.

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 INTURI RAMA RAO

PER BENCH : This Revenue’s appeal for AY.2018-19 arises from the CIT(A)-5, Hyderabad’s order dated 13-07-2020 passed in case No.10233 / 2019-20 / CIT(A)-5, involving proceedings u/s. 143(1) of the Income Tax Act, 1961 [in short, ‘the Act’].

2.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.2,05,22,220/- which stands deleted in the CIT(A)’s order, the assessee’s and Revenue’s plea before us are that the same had been paid before the due date of filing Sec.139(1) return and after the due date prescribed in the corresponding statutes; respectively. We notice in this factual backdrop that the legislature has not only incorporated necessary amendment in Sections 36(1)(va) but also u/s.43B of the Act vide Finance Act, 2021 followed by the CBDT’s 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 w.e.f.01-04-2021 only. We hold that the impugned disallowance has been rightly deleted in the CIT(A)’s order in view of all these latest developments. The Revenue fails in its sole substantive grievance therefore.

3.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open court on 21st September, 2021

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