VALTREE GLOBAL PRIVATE LIMITED,HYDERABAD vs. INCOME TAX OFFICERS,WARD-3(1), HYDERABAD

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ITA 10/HYD/2022Status: DisposedITAT Hyderabad03 February 2022AY 2018-193 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the legislative amendments to Sections 36(1)(va) and 43B, and the CBDT's clarification that these apply prospectively from 01-04-2021, render the impugned disallowance unsustainable for the assessment year in question.

What were the facts?

The assessee's appeal for AY 2018-19 concerned an ESI/PF disallowance of Rs. 2,99,333. The assessee argued the payment was made before the due date of filing the Section 139(1) return, while the Revenue contended it was paid after the statutory due date.

What were the issues?

Whether ESI/PF contributions paid after the statutory due date but before the due date for filing the Section 139(1) return are disallowable for AY 2018-19, considering subsequent legislative amendments and clarifications.

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 BENCHES “SMC”, HYDERABAD

Before: SHRI S.S.GODARA

For Appellant: Shri Siddharth Toshnival
For Respondent: Shri Rohit Mujumdar
Hearing: 03/02/2022Pronounced: 03/02/2022

O R D E R Per S. S. Godara, J.M. This assessee’s appeal for A.Y 2018-19 arises from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi’s order dated 15.11.2021 in case No.ITBA/NFAC/S/250/2021-22/1036923575(1) involving proceedings under section 250 of Income Tax Act, 1961 (in short, “the Act”).

2.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.2,99,333/- made in both the lower proceedings, the assessee’s and Revenue’s plea(s) before me 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 only. 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 only 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.

3.

This assessee’s appeal is allowed in above terms.

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