NICHINO INDIA PRIVATE LIMITED,HYDERABAD vs. DEPUTY COMMISSIONER OF INCOME TAX,CIRCLE-5(1), HYDERABAD

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ITA 546/HYD/2021Status: DisposedITAT Hyderabad17 February 2022AY 2018-193 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance was not sustainable. This was because legislative amendments and CBDT clarifications regarding the timing of such payments were applicable prospectively from April 1, 2021.

What were the facts?

The assessee's appeal for AY 2018-19 concerned a disallowance of ESI/PF contributions. The assessee claimed these were paid before the due date of filing the return under Section 139(1).

What were the issues?

The key issue was whether ESI/PF contributions paid after the due date prescribed in the respective statutes but before the due date for filing the income tax return were disallowable for the assessment year 2018-19.

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 A. MOHAN ALANKAMONY & SHRI S.S. GODARA

O R D E R Per Shri S.S. Godara, J.M. : This assessee’s appeal for Asst. Year 2018-19 arises from the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi’s order dt.28.10.2021 passed in case No.ITBA/NFAC/S/250/2021-22/1036615110(1) in proceedings under Section 143(3) of Income Tax Act, 1961 (‘the Act’).

Case called twice. Nobody appears on assessee's behest. We proceed ex-parte against assessee. Heard learned department representative.

2.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.4,09,324/- 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. 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 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 with prospective effect from 01-04-2021 only, 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 17th Feb.,2022.

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