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Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI
Before: SHRI PRADIP KUMAR KEDIA & SH. YOGESH KUMAR U.S.
The above appeal has been preferred by the assessee against the order of Commissioner of Income Tax Appeals-20, New Delhi (“CIT(A)” in short) dated 30/05/2018 arising out of the assessment order dated 23/12/2016 for AY 2013-14 passed by the Assessing Officer u/s 143(3) of IT Act.
As per the grounds of appeal, the assessee is aggrieved by the addition of Rs. 6,75,582/- and Rs. 14,197/- respectively which, being the EPF and ESI deposited after the due date prescribed under Employees Provident Funds and miscellaneous Act 1952, but deposited before the due date of filing return of income u/s 139(1) of Income Tax Act.
The Ld. AR Sh. Baldev Raj, CA submitted that, EPF amount of Rs. 6,75,582/- and ESI amount of Rs. 14,197/- which have been duly paid by the assessee before the due date of filing the return of income u/s 139(1) of the Income Tax Act, but the same was not deposited within the due date prescribed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. Thus, contended that, the assessee has complied the obligation of payment towards Employees Contribution before the due date of filing returns, therefore, the deductions are allowable u/s 36(1) (va) of the Act. The Ld. AR has relied on the decision of Hon’ble Delhi High Court in the case of Pr. CIT Vs. Pro interactive Services (India) Pvt. Ltd. vide order dated 10/09/2018 in ITA No. 983/2018.
Per contra, the Ld. Sr. DR Sh. Mithun Shete submitted that, the order of the AO and CIT(A) is well reasoned, further drawn our attention to the amendment to Section 36(1)(va)and Section 43(B) of Finance Act, 2021. Thus, contended that, the impugned order requires no interference from the Tribunal.
We have heard both the Ld. AR and Ld. Sr. DR , verified the records and gave out thoughtful consideration.
The identical issue has been decided by the Hon’ble Delhi High Court in the case of Pr. CIT Vs. Pro interactive Service (India) Pvt. Ltd. vide order dated 10/09/2018 in wherein the Hon’ble Jurisdictional High Court held hereunder:-
“In view of the judgment of the Division Bench of Delhi High Court in Commissioner of Income-Tax versus Aimil Limited, (2010) 321 ITR 508 (Del) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal.
The legislative intent was /is to ensure that the amount paid is allowed as an expenditure only when payment is actually made.
We do not think that the legislative intent and objective is to treat belated payment of Employee's Provident Fund (EPD) and Employee's State Insurance Scheme (ESI) as deemed income of the employer under Section 2(24)(x) of the Act.”
The above said decision of the Jurisdictional High Court is binding on the Tribunal as ratio decidendi.
The Ld. DR vehemently submitted that, the assessee has delayed payment of Employees Contribution PF/ESI, which is not allowable in view of amendment to Section 36(1)(va) and Section 43B of the Act effected by Finance Act, 2021.
The Coordinate Bench of the Tribunal in the Continental Restaurant Café Company Vs. ITO reported in (2021) 91 ITR 5(SN) 60 (Bang.) and Ananda Bhavan Sweets India Pvt. Ltd. Vs. and 403/Chny/2021 order dated 8/12/2021 has already held that, the said amendment to Section 39(1)(va) and Section 43B effected by Finance Act 2021 is having prospective effect. Since, the said amendment is having prospective effect and not being retrospective one the same cannot be applied to the present case.
By following the decision of Delhi High Court (Supra) and the decisions of Coordinate Bench of this Tribunal, we allow the grounds of appeal of the assessee.
In the result, the result appeal of the assessee is allowed.