NEEV INFRASTRUCTURE PVT. LTD,MUMBAI vs. ACIT CENTRAL CIRCLE 4(2), MUMBAI

The appellant, M/s. Neev Infrastructure Pvt. Ltd. (hereinafter referred to as ‘the assessee company’) by filing the present appeal, sought to set aside the impugned order dated 18.11.2021 passed by Commissioner of Income Tax (Appeals)-52, Mumbai [hereinafter referred to as the CIT(A)] qua the assessment year 2017-18 on the grounds inter alia that :- “1) In the facts and circumstances of the case and in law the Assessing Officer erred in adding Rs.6,68,547/- on account of alleged 2 M/s. Neev Infrastructure Pvt. Ltd.

Briefly stated facts necessary for adjudication of the controversy at hand are : the assessee company being into the business as builder, developer and civil contractor and manufacturer of ready mix concrete filed its return of income on 30.03.2018 at the total income of Rs.3,75,51,680/-, which was revised on 28.05.2018 & 15.03.2018 declaring total income of Rs.3,75,51,680/- & Rs.3,85,27,980/- respectively which was 3 M/s. Neev Infrastructure Pvt. Ltd.

Declining the contention raised by the assessee that the payments have been made well before the date of filing the return, AO proceeded to disallow the late payment of Rs.6,68,547/- made by the assessee on account of PF & ESIC under section 2(24)(X) read with section 36(1)(va) of the Income Tax Act, 1961 (for short ‘the Act’).

Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has upheld the disallowance made by the AO by dismissing the appeal. Feeling aggrieved the assessee has come up before the Tribunal by way of filing present appeal.

We have heard the Ld. Authorised Representatives of the parties to the appeal, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and law applicable thereto.

Undisputedly, assessee has made payment towards the employees’s PF & ESIC after due date prescribed under the relevant Act which is tabulated for ready perusal as under: 4 M/s. Neev Infrastructure Pvt. Ltd.

Perusal of the aforesaid table shows that contributions made by employees on account of PF & ESIC were deposited beyond the due date prescribed under the Act. But at the same time it is admitted fact on record that the said payment has been deposited well before the date of filing the return of income by the assessee company.

Identical issue has been decided by the Hon’ble Bombay High Court in case of CIT V. Ghatge Patil Transporters Ltd. 368 ITR 749 by confirming the order passed by the Tribunal that deduction claimed by the assessee on account of employees contribution to PF & ESIC well before the due date of filing return of income is allowable deduction.

Hon’ble High Court of Bombay in case of Ghatge Patil Transporters Ltd. (supra) held that both employees’ and employer’s contribution are covered under amendment to section 43B and covered under judgment of Hon’ble Supreme Court in case of CIT vs. Alom Extrusions Ltd. (2009) 319 ITR 306 and such deduction claimed by the assessee is allowable.

Co-ordinate Bench of the Tribunal in case of M/s. Adyar Ananda Bhavan Sweets India P. Ltd. vs. ACIT (supra) also decided the identical issue in favour of the assessee by holding that the payment of employees contribution qua PF & ESIC if made before 6 M/s. Neev Infrastructure Pvt. Ltd.

In view of what has been discussed above, we are of the considered view that since the amended provisions contained under section 43B read with section 36(1)(va) of the Act are not applicable for the year under consideration i.e. A.Y. 2017-18 as the amendment will be effective from A.Y. 2021-22 and the AO/ Ld. CIT(A) have erred in disallowing the same. Consequently, impugned order passed by the Ld. CIT(A) is set aside and appeal filed by the assessee is allowed.