SHRISHTI ELECTRICALS PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD

PDF · subscribers
ITA 578/HYD/2020Status: DisposedITAT Hyderabad20 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 due to recent legislative amendments and CBDT clarifications which applied prospectively from April 1, 2021. The impugned disallowance was deleted.

What were the facts?

The assessee's appeal for AY 2018-19 concerned an ESI/PF disallowance of Rs. 7,81,469. The assessee claimed the payment was made before the due date of filing the return under Section 139(1).

What were the issues?

Whether ESI/PF contributions paid after the due date prescribed by the respective statutes but before the due date of filing the return under Section 139(1) are disallowable.

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 “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 04-09-2020 passed in case No.10231 / 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.7,81,469/- made in both the lower proceedings, the assessee’s and Revenue’s plea before us is 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 statutes; 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 20th September, 2021

More judgments on Section 36(1)(va)

All 6,054 judgments and leading authorities on Section 36(1)(va) →

Recent GST High Court judgments

Search GST case law →