JAI BALAJEE SECURITY SERVICES PRIVATE LIMITED,TIRUPATHI vs. ASSISTANT COMMISSIONER OF INCOME TAX,CIRCLE-1(1), TIRUPATHI

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ITA 485/HYD/2021Status: DisposedITAT Hyderabad21 January 2022AY 2019-203 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 the legislative amendments and CBDT clarifications regarding the applicability of these provisions were prospective, effective from April 1, 2021.

What were the facts?

The assessee claimed deductions for ESI/PF contributions. The lower authorities disallowed these contributions, stating they were paid after the due date prescribed by the respective statutes but before the due date for filing the Section 139(1) return.

What were the issues?

Whether ESI/PF contributions paid after the statutory due date but before the due date for filing the return of income are allowable as a deduction, considering recent legislative changes and clarifications.

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 ‘ B ’ BENCH, HYDERABAD.

Before: SHRI S.S. GODARA & SHRI L. P. SAHU

For Appellant: Shri Sashank Dundu, Adv

O R D E R Per Shri S.S. Godara, J.M. : 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.06.10.2021 passed in case No.ITBA/NFAC/S/250/2021-22/1036184823(1) in proceedings under Section 250 of Income Tax Act, 1961 (‘the Act’). Heard both parties. Case file perused.

2.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.4,85,47,471/- made in both the lower proceedings, the assessee's and Revenue’s rival stands adopted

2 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 statute(s); 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.

4.

This assessee’s appeal is allowed in above terms. Order pronounced in the open court on 21st Jan.,2022.

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