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Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI ABY T VARKEY & SHRI OM PRAKASH KANT
This appeal was adjudicated on 19.05.2022, however, same has been recalled by way of the order of Tribunal in Miscellaneous Application No. 403/Mum/2022 dated 03.03.2023. The grounds raised by the assessee are reproduced as under:
“Disallowance of Rs.54,27,853/- being employee's contribution to PF and ESIC
M/s S Zhaveri Pharmakem Pvt. Ltd. M/s S Zhaveri Pharmakem Pvt. Ltd. 2 ITA No. 254/M/2022
The Comm. of Income 1. The Comm. of Income-tax (Appeals), National Faceless tax (Appeals), National Faceless Appeal Centre [CIT(A)], erred in law and on facts in Appeal Centre [CIT(A)], erred in law and on facts in Appeal Centre [CIT(A)], erred in law and on facts in confirming disallowance of Rs.54,27,853/ confirming disallowance of Rs.54,27,853/- being employee's being employee's contribution to PF (Rs.46, 14 contribution to PF (Rs.46, 14,448/-) and ESIC (Rs.8,13,405/ ) and ESIC (Rs.8,13,405/).
The CIT(A) 2. The CIT(A) erred in failing to appreciate that the appellant erred in failing to appreciate that the appellant had correctly claimed the deduction under section 43B of the had correctly claimed the deduction under section 43B of the had correctly claimed the deduction under section 43B of the Income-tax Act, 1961 (the Act), in respect of employee's tax Act, 1961 (the Act), in respect of employee's tax Act, 1961 (the Act), in respect of employee's contribution to PF and SIC based on decisions of contribution to contribution to PF and SIC based on decisions of PF and SIC based on decisions of jurisdictional Hon'ble Bombay High Cour jurisdictional Hon'ble Bombay High Court. 3. The CIT (A) erred in failing to appreciate that amendments 3. The CIT (A) erred in failing to appreciate that amendments 3. The CIT (A) erred in failing to appreciate that amendments to section 36(1)(va) and section 43B of the Act by the Finance to section 36(1)(va) and section 43B of the Act by the Finance to section 36(1)(va) and section 43B of the Act by the Finance Act, 2021 could not be applied retrospectively to the Act, 2021 could not be applied retrospectively to the Act, 2021 could not be applied retrospectively to the assessment year 2018 assessment year 2018-19. 4. The CIT(A) erred in failing to appreciate that 4. The CIT(A) erred in failing to appreciate that 4. The CIT(A) erred in failing to appreciate that the Memorandum explaining the provisions in the Finance Bill, Memorandum explaining the provisions in the Finance Bill, Memorandum explaining the provisions in the Finance Bill, 2021 itself stated that the said amendments to section 2021 itself stated that the said amendments to section 2021 itself stated that the said amendments to section 36(1)(va) and section 43B of the Act will take effect from 1S 36(1)(va) and section 43B of the Act will take effect from 1S 36(1)(va) and section 43B of the Act will take effect from 1S April, 2021 and will accordingly apply to the assessment April, 2021 and will accordingly apply to the assessment April, 2021 and will accordingly apply to the assessment year 2021-22 and su 22 and subsequent assessment years. 2. We have heard rival submission of parties on the issue in We have heard rival submission of parties on the issue in We have heard rival submission of parties on the issue in dispute and perused the relevant material on record. The issue perused the relevant material on record. The issue perused the relevant material on record. The issue involved in the appeal involved in the appeal is of disallowance of Rs.54,27,853/ s of disallowance of Rs.54,27,853/- being employee’s contribution to PF and ESI. s contribution to PF and ESI. In the grounds raised, the In the grounds raised, the assessee has referred to the earlier decision of the Jurisdictional assessee has referred to the earlier decision of the Jurisdictional assessee has referred to the earlier decision of the Jurisdictional High Court and also referred that amendment introduced by way of High Court and also referred that amendment introduced by way of High Court and also referred that amendment introduced by way of Finance Bill, 2021 is prospective in application and not applicable Finance Bill, 2021 is prospective in application and not applicable Finance Bill, 2021 is prospective in application and not applicable for the assessment year unde for the assessment year under consideration. We find that the r consideration. We find that the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Checkmate Services Pvt. Hon’ble Supreme Court in the case of Ltd. v. CIT reported in 143 taxmann.com 178 has held that Ltd. v. CIT reported in 143 taxmann.com 178 Ltd. v. CIT reported in 143 taxmann.com 178 employees contribution to PF and ESI paid after due date employees contribution to PF and ESI paid after due date employees contribution to PF and ESI paid after due date
M/s S Zhaveri Pharmakem Pvt. Ltd. M/s S Zhaveri Pharmakem Pvt. Ltd. 3 ITA No. 254/M/2022 prescribed under the relevant enactment is not eligible for prescribed under the relevant enactment is not prescribed under the relevant enactment is not deduction u/s 36(1)(va) of the Act. The interpretation of the deduction u/s 36(1)(va) of the Act. The interpretation of the deduction u/s 36(1)(va) of the Act. The interpretation of the provisions made by the Hon’ble Supreme Court is effective from the provisions made by the Hon’ble Supreme Court is effective from the provisions made by the Hon’ble Supreme Court is effective from the date of inception of the relevant provisions of the Act and therefore, date of inception of the relevant provisions of the Act and therefore, date of inception of the relevant provisions of the Act and therefore, following the same the assessee following the same the assessee, is not eligible for deduction in is not eligible for deduction in respect of employee’s contribution to PF and ESI paid after the due s contribution to PF and ESI paid after the due s contribution to PF and ESI paid after the due date under the relevant enactment. The contention of the assessee date under the relevant enactment. The contention of the assessee date under the relevant enactment. The contention of the assessee regarding amendment to section 36(1)(va) of the Act and section regarding amendment to section 36(1)(va) of the Act and section regarding amendment to section 36(1)(va) of the Act and section spective is not relevant in the facts of the 43B of the Act being pro 43B of the Act being prospective is not relevant in the facts of the case. The grounds raised by the assessee are dismissed. case. The grounds raised by the assessee are dismissed. case. The grounds raised by the assessee are dismissed.