SWATI AIRPORT SUPPORT SERVICES PRIVATE LIMITED,HYDERABAD vs. DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(2), HYDERABAD

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ITA 538/HYD/2020Status: DisposedITAT Hyderabad17 January 2022AY 2018-194 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 of ESI/PF contributions was not sustainable. This was based on the fact that the contributions were paid before the due date of filing the return under Section 139(1) and after the due dates prescribed by the respective statutes, and considering the prospective applicability of recent legislative amendments.

What were the facts?

The assessee's appeal was filed with a one-day delay, which was condoned by the tribunal due to the COVID-19 pandemic. The substantive issue concerned the disallowance of ESI/PF contributions.

What were the issues?

Whether ESI/PF contributions paid after the due date prescribed by the respective statutes but before the due date for filing the income tax return are allowable as a deduction. The applicability of recent legislative amendments to the assessment year in question.

Which sections of the Income-tax Act were involved?

Section 139(1),Section 36(1)(va),Section 43B

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)-3, Hyderabad’s order dt.31.07.2020 passed in case No.10230/2019-20/A3/CIT(A)- 3 in proceedings under Section 143(1) of Income Tax Act, 1961 (‘the Act’).

Case called twice. None appeared at assessee's behest.

Heard learned department representative. We proceed to hear exparte.

2.

We notice at the outset that assessee's instant appeal suffers from 1 day delay in filing. Learned counsel submitted that due to the outbreak of pandemic covid 19 unable to get the documents from the department which caused the impugned delay in filing of the instant appeal. Case law Collector Land Acquisition Vs. Mst.

Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No.9488 & 9489/2019 dated 17th Dec., 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice.

We accordingly hold that assessee's impugned delay of one is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits therefore.

3.

Coming to the sole substantive issue of ESI/PF disallowance of Rs.43,77,132- made in both the lower proceedings, the rival stands adopted throughout and that the 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 only 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.

These assessee’s appeal is allowed in above terms.

Order pronounced in the open court on 17th Jan.,2022.

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