UJJIVAN SMALL FINANCE BANK LIMITED,DELHI vs. DCIT-25(1), DELHI

Since the issue in all the appeals are common, therefore we clubbed all of them together for the sake of brevity and convenience. However, we are taking as a lead case wherein assessee has raised the following grounds:

The Ld CIT(A) has erred on facts and in law in confirming the addition of Rs.11,81,760/- made by the Assessing officer by invoking the provisions of section 36(1)(va) of the Act, 1961. 4. That the Ld CIT(A) has erred on facts and in law ignoring the well-established judicial pronouncements including that of the jurisdiction High Court. 5. That Ld CIT(A) has erred on facts and in law in holding that the explanation inserted u/s 36(i)(va) is retrospectively effective while the Memorandum explaining the provisions of Finance Bill 2021 clearly mandates that the amendment will take effect from 01.04.2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years. 6. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of Contemporary jurisprudence. 7. That the appellant craves leave to add/alter/any/all grounds of appeal before or at the time of hearing of the appeal.”

Learned DR on the other hand supported the order of lower authorities and also placed reliance on the decision of Delhi Tribunal in the case of Vedvan Consultants Pvt. Ltd. vs DCIT in order dated 26.08.2021. He also submitted that the amendment brought out by Finance Act 2021 would be applicable to the present case as by the amendment it has been clarified that provisions of Section 43B of the Act shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his employees to which the provisions of sub clause (x) of Clause (24) of Section 2 applies.

We have heard the rival submissions and perused the material available on record. The issue is no more res-integra. The issue has already been settled in favour of the assessee by various judicial pronouncements by the Tribunal. The Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs. Pro Interactive Service (India) Pvt. Ltd. dated 10.09.2018 has already taken a view in favour of the assessee by holding as under:

As far as reliance by Learned DR on the amendment brought out by Finance Act 2021 is concerned, “notes on clauses” to the Finance Bill 2021 clearly states that the amendment will take effect from 1st April 2021 and will apply in relation to the assessment year 2021-22 and subsequent assessment year. In such a situation, we are of the view that the amendment brought out by Finance Act 2021 does not apply to the assessment year under consideration.

Before us, Revenue has not placed any material on record to demonstrate that the aforesaid order cited hereinabove has been overruled/stayed/set aside by higher judicial forum. In view of the aforesaid facts, we are of the view that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, albeit before filing the return of income. Admittedly in all the above-stated matters, the Revenue had not contended that the assessee has deposited the contribution after the filing of the return of income. In view of the above, Respectfully following the decision of the Hon’ble High Court cited hereinabove, we allow the appeals filed by the assessee and dismiss the appeal of the Revenue.

In the result, all the appeals filed by the assessee are allowed and one appeal filed by the Revenue is dismissed.