SARVESH MULTI PLAST INDIA (P) LTD,ERODE vs. DCIT,CPC, BENGALURU

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ITA 255/CHNY/2021Status: DisposedITAT Chennai11 January 2022AY 2018-193 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that a coordinate bench held the amendment to Section 36(1)(va) to be prospective. Therefore, the matter was remitted back to the first appellate authority to verify the payment dates and re-adjudicate the issue.

What were the facts?

The assessee claimed deduction for late payment of employees' contribution to ESI and PF. The Assessing Officer disallowed this amount as it was paid after the due date but before the return filing date. The assessee contended that payment before the return filing date makes it deductible.

What were the issues?

Whether late payment of employees' contribution to ESI and PF, made before the due date of filing the return of income, is allowable as a deduction. Whether the amendment to Section 36(1)(va) is retrospective or prospective.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “A” BENCH, CHENNAI

Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

For Appellant: Shri S. Sridhar(Advocate) – Ld. AR, Shri ARV Sreenivasan, (Addl. CIT) –Ld. DR
For Respondent: Shri ARV Sreenivasan, (Addl. CIT) –Ld. DR

आयकरअपीलसं./ (िनधा�रणवष� / Assessment Year: 2018-19) SarveshMultiplast India (P) Ltd., DCIT, बनाम/ Sr.No. 367/1, Kothampalayam, CPC, Bengaluru. Vs. Chennimalai,Erode – 638 051. �थायीलेखासं./जीआइआरसं./PAN/GIR No. AANCS-0352-D (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Shri S. Sridhar(Advocate) – Ld. AR ��थ�कीओरसे/Respondent by : Shri ARV Sreenivasan, (Addl. CIT) –Ld. DR सुनवाईकीतारीख/ : 11-01-2022 Date of Hearing घोषणाकीतारीख / : 11-01-2022 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)

1.

The only grievance of the assessee in the captioned appeal forAssessment Year (AY) 2018-19is disallowance on account of late payment of employees’ contribution to ESI and PFfor Rs.26.63 Lacs. The Ld. AR submitted that these payments were made by the assessee before due date of filing of return and therefore, the same are allowable as deduction. Reliance has been placed on the recent decision of this 2 - Tribunal in Adyar Anand Bhawan Sweets India Pvt. Ltd. V/s ACIT (ITA Nos. 402-403/Chny/21 dated 08.12.2021). On the other hand, Ld. DR submitted that amendment to Sec.36(1)(va) by way of insertion of Explanation-2 by Finance Act, 2021 w.e.f. 01.04.2021 was retrospective in nature.

2.

The material on record would show that an intimation was issued to the assessee u/s 143(1) on 16.10.2019 wherein the Business Income was taken to be Rs.474.58 Lacs as against Rs.447.95 Lacs reflected by the assessee. The difference arose on account of the fact that there was late payment of employees’ contribution to PF & ESI amounting to Rs.26.63 Lacs. Upon further appeal before National Faceless Appeal Centre (NFAC), the assessee submitted that the dues were paid before due date of filing of return of income and therefore, the same would be deductible as per various judicial decisions. However, relying upon contrary decision of Hon’ble Gujarat High Court in Gujarat State Road Transport Corporation (41 Taxmann.com 100), it was held by appellate authority that the same would not be allowable as per Sec.36(1)(va). The amendment to this section by Finance Act, 2021 was clarificatory in nature. Aggrieved, the assessee is in further appeal before us.

3.

We find that in the cited decision of Adyar Anand Bhawan Sweets India Pvt. Ltd. V/s ACIT (ITA Nos. 402-403/Chny/21 dated 08.12.2021), it has already been held by the coordinate bench that the amendment to Sec.36(1)(va) by way of insertion of explanation-2 would operate prospectively only. Therefore, considering the same, we remit the matter back to the file of learned first appellate authority to ascertain

3 - the actual dates of payment made by the assessee and re-adjudicate the issue in the light of this decision. 3. The appeal stand allowed for statistical purposes.

Order pronounced on 11thJanuary, 2022.

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