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Income Tax Appellate Tribunal, DELHI BENCH ‘G’, NEW DELHI
Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA
This appeal by the assessee is preferred against the order dated 07.09.2021 by NFAC, Delhi for A.Y. 2018-19.
2. The grievance of the assessee read as under :- 1. Ld. CIT (A) has erred in law and on merits of the case was not justified in confirming the addition of Rs. 11,24,145/- made by A.O. (CPC) on account of late deposit of employee contribution towards PF/ESI, even it is paid before the due date of filing of ITR in view of Section 43B of The Income Tax Act, 1961 and ignored various judicial pronouncement cited by the assessee.
CIT (A) has erred in law in confirming the disallowance of employee contribution to PF/ESI in the light of amendment in sections 36(va) as well as in section 43B by inserting corresponding explanations through finance Act 2021. Although the impugned employee PF/ESI now comes under the provision of section 36(va) only, but the memorandum explaining Finance Bill 2021 says that these amendments will take effect from 01.04.2021 and will accordingly apply to AY 2021- 22 and subsequent assessment years. Thus the legislature itself has condoned the impugned default before 01.04.2021.
ITAT Branch of Delhi in the case of Insta Exhibitions Pvt Ltd vs ACIT (and ITA no. 4959/DEL/2016) wherein it was held that the belated payments of ESI and PF cannot be treated as deemed income under section 2(24) . Further it was held that notes on clauses introducing Finance Bill holds that amendment is effective from AY 2021-22 and thus deleted the addition on this account.
4. That the appellant craves leave to add, amend or alter any of the grounds of appeal on or before the date of hearing.
3. The sum and substances of the grievance in the captioned appeal pertains to the disallowance of PF and ESI payments on account of these payments being made beyond the due date specified under the specific parent legislation but before filing of the Income Tax Return.
Representative of the assessee and the DR fairly conceded that the issue in the captioned appeal is identical and on such concession the appeal were heard.
After carefully perusing the grievance in the captioned appeal, we are of the considered opinion that the issue is now well settled in favour of the assessee and against the revenue by the decision of the Hon’ble High Courts as follows :-
In the light of the decisions cited here in above, we direct the AO to delete the impugned disallowance in the hands of appellant.
In the result, the appeal of the assessee is allowed.
The order is pronounced in the open court on 23.03.2022 in the presence of both the representatives.