V MART STORES,SIDDIPET vs. INCOME TAX OFFICERS,WARD-1, SIDDIPET

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ITA 479/HYD/2021Status: DisposedITAT Hyderabad02 March 2022AY 2019-20203 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance was not sustainable. It noted the legislative amendments to Sections 36(1)(va) and 43B via the Finance Act, 2021, and the CBDT's clarification that these amendments apply prospectively from 01-04-2021.

What were the facts?

The assessee's appeal concerned a disallowance of Rs. 5,53,520/- for ESI/PF contributions. The assessee claimed the payments were made before the due date for filing the Section 139(1) return, while the Revenue contended they were made after the statutory due dates.

What were the issues?

The key issue was whether ESI/PF contributions paid after the statutory due dates but before the due date for filing the return under Section 139(1) were disallowable, considering recent legislative changes and their prospective application.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 139(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD ‘ SMC ’ BENCH, HYDERABAD.

Before: SHRI S.S. GODARA

For Appellant: Shri A.Srinivas, C.A

O R D E R Per S. S. Godara : This assessee’s appeal for Asst. Year 2019-20 arises from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi’s order dt.29.09.2021 passed in case No. ITBA/NFAC/S/250/2021- 22/1035995262(1) in proceedings under Section 250 of Income Tax Act, 1961 (‘the Act’).

Heard both the parties. Case file perused.

2 ITA 479/Hyd/2021 2. Coming to the sole substantive issue of ESI/PF disallowance of Rs.5,53,520/- made in both the lower proceedings, assessee's and Revenue’s rival stands adopted in their pleadings 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. I 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 only, I hold that the impugned disallowance is not sustainable in view of all these latest developments. The impugned ESI/PF disallowance is deleted therefore.

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