SRI RAMA SPINNER PRIVATE LIMITED,HYDERABAD vs. M. BABU RAO, HYDERABAD

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ITA 740/HYD/2020Status: DisposedITAT Hyderabad04 March 2022AY 2013-143 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that recent legislative amendments and CBDT clarifications, applicable prospectively from 01.04.2021, rendered the impugned disallowance unsustainable. The disallowance was therefore deleted.

What were the facts?

The assessee's appeal concerned an ESI/PF disallowance of Rs. 1,51,877. The assessee claimed the payment was made before the due date for filing the return under Section 139(1), while the Revenue argued it was paid after the statutory due date.

What were the issues?

The key issue was whether the disallowance of ESI/PF contributions paid after the statutory due date but before the due date for filing the return was valid in light of subsequent legislative changes.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri S.S. Godara & Shri Inturi Rama Rao

For Respondent: Shri T. Sunil Goutam
Hearing: 03.03.2022Pronounced: 04.03.2022

Assessment Year: 2013-14 Sri Rama Spinner Private Vs. The Income Tax Officer, Limited, Ward 3(4), Secunderabad. Hyderabad. PAN : AABCR7953H (Appellant) (Respondent) Assessee by: None Revenue by: Shri T. Sunil Goutam Date of hearing: 03.03.2022 Date of pronouncement: 04.03.2022 O R D E R Per S. S. Godara, J.M. This assessee’s appeal arises from the Commissioner of Income Tax (Appeals) – 3, Hyderabad’s order dated 31.08.2020 in case No.10575/2015-16/B2/CIT(A)-3 involving proceedings u/s 143(3) of the Income Tax Act, 1961 [in short, ‘the Act’].

2.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.1,51,877/- made in both the lower proceedings, the assessee’s and Revenue’s plea(s) before us are that the same had been paid before the due date of filing Sec.139(1) return and after the due date prescribed in the corresponding statutes; respectively. We notice in this factual backdrop that the legislature has not only incorporated necessary amendment in Sections 36(1)(va) as well as u/s. 43B vide Finance Act, 2021 to this effect but also the CBDT has issued Memorandum of Explanation that the same applies w.e.f. 01-04-2021. It is further not an issue that the foregoing legislative amendments have proposed employers’ contribution / disallowance u/s.43B as against employee’s contribution u/s.36(va) of the Act; respectively. However, keeping in mind the fact that the same has been clarified to be applicable with prospective effect from 01-04-2021, we hold that the impugned disallowance is not sustainable in view of all these latest developments. The impugned ESI/PF disallowance is deleted therefore.

3.

This assessee’s appeal is allowed in above terms.

Order pronounced in the Open Court on 04th March, 2022.

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