RATNADEEP RETAIL PRIVATE LIMITED,SECUNDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1), HYDERABAD

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ITA 607/HYD/2020Status: DisposedITAT Hyderabad20 September 2021AY 2019-203 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 to Sections 36(1)(va) and 43B of the Act, which were clarified to be applicable only from April 1, 2021, and that the disallowance pertained to employee's contribution under Section 36(va).

What were the facts?

The assessee's appeal for AY 2019-20 concerned a disallowance of Rs. 3,84,560/- related to ESI/PF contributions. The Revenue argued that these payments were made after the due date for filing the return under Section 139(1) but after the due dates prescribed by the respective statutes.

What were the issues?

Whether ESI/PF contributions paid after the statutory due date but before the due date for filing the return are allowable deductions. 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 “A” : HYDERABAD

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

PER S.S.GODARA, J.M. : This assessee’s appeal for AY.2019-20 arises from the CIT(A)-3, Hyderabad’s order dated 15-09-2020 passed in case No.10028 / 2020-21 / C / CIT(A)-3, involving proceedings u/s. 143(1) of the Income Tax Act, 1961 [in short, ‘the Act’]. Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.

2.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.3,84,560/- the Revenue’s plea before us is 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 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

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