MAJESTIC ENTERPRISES,HYDERABAD vs. INCOME TAX OFFICERS,WARD -5(1), HYDERABAD

Assessment Year: 2018-19 Majestic Enterprises, Vs. Income-tax Officer, Hyderabad. Ward – 5(1), Hyderabad. PAN – AACFM818F 0(Appellant) (Respondent) Assessee by: Shri MV Joshi for P. Murali Mohana Rao Revenue by: Shri Swapnil Patil for Shri TS Goutam Date of hearing: 02/02/2022 Date of pronouncement: 02/02/2022 O R D E R PER A. MOHAN ALANKAMONY, A.M.: This appeal filed by the assessee is directed against CIT(A)’s National Faceless Appeal Centre (NFAC) order dated 26/10/2021 for AY 2018-19 involving proceedings u/s 154 of the Income Tax Act, 1961, in short “the Act”.

:- 2 -: Majestic Enterprises, Hyd. before the due date as provided u/s 36(1)(va) of the I.T. Act.

5 We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. The assessee submitted before the lower authorities that the employees’ contribution to PF paid after the due date, but, before the due date of filing the return of income. Therefore, the issue has been settled that if the assessee has paid the PF and :- 3 -: Majestic Enterprises, Hyd.

ESI payments before the due date of filing of return income u/s 139(1) of the Act, no disallowance is warranted as held by the coordinate bench of the ITAT Hyderabad in case of for Assessment Year: 2013-14, in case of Value Momentum Software Services Private Limited, Vs Deputy Commissioner of Income Tax, in which, it was held as under:

“5. Next comes the latter issue of Section 43B disallowance of Rs.8,11,648/- pertaining to employees provident fund. It is not in dispute that learned lower authorities held that the same had to be deposited before the due date prescribed in the corresponding statute than the due date for filing Section 139(1) return. The Revenue’s case in tune thereof relies on Section 36(va) read with explanation thereto that it is not Section 43B but the former provision which is applicable in such an instance. We find no merit in the Revenue’s foregoing stand. We take note of the explanatory memorandum to the Finance Act, 2021 proposing amendment in both Section 36(va) as well as Section 43B by inserting corresponding Explanations that although the impugned employees provident fund comes under the former provision only, the same is applicable from 01-04-2021 onwards. Meaning thereby that the legislature itself has condoned the impugned default before 01-04-2021. We thus delete the impugned employees provident fund disallowance of Rs.8,11,648/- for this precise reason alone. Necessary computation to follow as per law.”

5.1 Respectfully, following the above judgement of the co- ordinate bench of Tribunal, we direct the AO to delete the addition of Rs. 5,97,685/- made towards employees PF contribution and confirmed by the ld. CIT (A) and :- 4 -: Majestic Enterprises, Hyd. accordingly, the grounds raised by the assessee on this issue are allowed.

Pronounced in the open court on 2nd February, 2022.