VIVIMED LIFE SCIENCE PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD

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ITA 606/HYD/2020Status: DisposedITAT Hyderabad21 September 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. It noted that legislative amendments and CBDT clarifications regarding the prospective applicability of such disallowances from April 1, 2021, were in place.

What were the facts?

The assessee made ESI/PF payments after the due date prescribed by the respective statutes but before the due date for filing the return of income. The lower authorities made a disallowance of Rs. 29,50,337/- on this account.

What were the issues?

Whether ESI/PF contributions paid after the statutory due date but before the return filing due date are disallowable. The applicability of recent legislative amendments and CBDT clarifications on this issue.

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 “A” : 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 11-09-2020 passed in case No.1112 / 2019-20 / B3 / CIT(A)-3, 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.29,50,337/- made in both the lower 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 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 impugned ESI/PF disallowance is deleted therefore.

3.

This assessee’s appeal is allowed in above terms.

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

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