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Income Tax Appellate Tribunal, MUMBAI BENCH “H”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI OM PRAKASH KANT
Per Kuldip Singh, Judicial Member:
Appellant M/s. Haldiram Foods International Pvt. Ltd. (hereinafter referred to as ‘assessee’) by filing present appeal sought to set aside the impugned order passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] on the grounds inter alia that: “1. The Hon. CIT(A) as well as Ld. A.O. ought to have allowed the PF and ESIC dues of Rs. 1,60,02,116/-, that were paid before filing of the Income Tax Return U/S.139 of the I. T. Act, as held by the Jurisdictional as well as other High Courts. Tax effect relating to each Ground of Appeal -
Rs.55,91,780/-
2. The Hon. CIT(A) was not justified in upholding the adjustments made U/S. 143(1) by the Ld. A.O. to the income of the appellant on debatable issue.”
2 M/s. Haldiram Foods International Pvt. Ltd.
Briefly stated facts necessary for adjudication of the controversy at hand are : during the assessment proceedings the Assessing Officer (AO)-CPC, Bangalore has disallowed employees’ contribution to Provident Fund (PF) and Employee State Insurance Corporation (ESIC) paid by the assessee for the year under consideration, after due date prescribed under the PF/ESIC Act and thereby made the addition of Rs.1,60,02,116/- under 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 partly allowed the same. Feeling aggrieved from the impugned order 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, the assessee has deposited the employees contribution of PF and ESI after the due date prescribed under Act. It is also not in dispute that the assessee deposited employees contribution on account of PF and ESI with the state exchequer well before the filing of return of income as is evident from the tax audit report.
In the backdrop of the aforesaid undisputed facts the Ld. A.R. for the assessee contended that the identical issue has 3 M/s. Haldiram Foods International Pvt. Ltd. already 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 the due date of filing of return of income, the same is allowable deduction as per provisions of Section 2(24)(x) r.w.s. 36(1)(va) r.w.s. 43B of the Act.
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. 2018-19 as the amendment will be effective from A.Y. 2021-22 and the AO/ Ld. CIT(A) have erred in disallowing the same. Resultantly, impugned order passed by Ld. CIT(A) is not sustainable in the eyes of law hence set aside and AO is directed to allow the employees’ 4 M/s. Haldiram Foods International Pvt. Ltd. contribution deposited by the assessee well before filing the return of income. Hence, appeal filed by the assessee is allowed.
Order pronounced in the open court on 30.05.2022.