SHRINIWAS MISHRA,MUMBAI vs. DY.CIT CPC, BANGALORE

O R D E R

PER PAVAN KUMAR GADALE JM:

1. The Id. CIT(A) has erred in confirming the addition of Rs.22,95,056/- being payment of Employees contribution towards Provident Fund and ESIC on the ground that the same have been paid late as per due date specified under the respective Act. It is submitted that the Employee's Contribution towards PF and ESIC of Rs. 22,95,056/- have been deposited, though after due date prescribed under the relevant Act, but before the due date of filing of return of income u/s 139(1) of the Income Tax Act. On facts and circumstances of the case, all the contributions deposited towards PF and SIC before due date of filing of return of income be allowed u/s 43 of the Income Tax Act and addition made by Ld. AO of Rs 22,95,056/- being incorrect and illegal be deleted in the Shriniwas Mishra, Mumbai. interest of justice. The same be held accordingly.

2. The ld. CIT(A) has erred in confirming the addition of Rs.22,95,056/- on account of Employee's contribution towards Provident Fund and SIC by not following the decision of Hon'ble Bombay High Court in case of CIT Vs Ghatge Patil Transports Ltd - 53 taxmann.com 141. It is submitted that the jurisdictional High Court has clearly held that the payment of employees contribution towards Provident Fund and SIC are allowable as per the provisions of section 43B of Income Tax Act, 1961 and thus not to follow the decision of Hon'ble Jurisdictional high court is clearly a contempt court. In view of this, respectfully following decisions of Hon'ble Bombay High Court, the addition made of Rs.22 95.056/- be deleted. 3. The ld. CIT(A) has erred in confirming the addition of Rs.22,95,056/- being payment of Employees contribution towards Provident Fund and ESIC by incorrectly interpreting the amended provisions of Sections 36(va) as well as 43B of Income tax Act vide Finance Act, 2021. It is submitted that Memorandum and Finance Bill clearly suggest that these Shriniwas Mishra, Mumbai. amendments will take effect from 1st April, 2021 and will accordingly apply to the assessment year 2 021-22 and subsequent assessment years. In view of this, the amended provisions of Sections 36(va) as well as 43B vide Finance Act, 2021 will apply prospectively and not retrospectively to the year under consideration. i.e. AY 2018-19 and thus the addition made and confirmed of R 22,95,056/- by incorrect interpretation be strongly deserves to be deleted.

The Order passed by Ld. CIT(A) is bad in law and contrary to the provisions of law and facts. It is submitted that the same be held so now.

6. At the time of hearing, the Ld. AR of the assessee submitted that that the assessment was completed u/s 143(1) of the Act with the disallowance of PF& ESIC payments. Earlier the Hon’ble Tribunal has allowed the assessee appeal and on the MA of the Revenue, the ITAT order was recalled. The Ld.AR emphasized that there was never an opportunity to the assessee to submit the details of payments/deposits before the AO. Further The Ld. AR has filed the statement of ESI and PF contribution due dates and actual contribution. The Ld. AR contentions are that the important facts of accrual of salary and actual deposits are to be verified and there is disallowance as per the intimation U/sec 143(1) of the Act. The assessee has made deposits/payments within the due date and the grace Shriniwas Mishra, Mumbai. period allowed under the respective Acts and pleaded for one more opportunity before the lower authorities to substantiate with the material evidences and prayed for allowing the appeal. Contra, the Ld. DR supported the order of the CIT(A).