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Income Tax Appellate Tribunal, PUNE “B” BENCH, PUNE
Before: SHRI SS VISWANETHRA RAVI & SHRI G. D. PADMAHSHALI
ORDER PER G. D. PADMAHSHALI, AM; This appeal is assailed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi[for short “NFAC”] dt.12/03/2021 passed u/s 250 of Income-Tax Act, 1961 [for short “the Act”], which dove out of an order of intimation passed u/s 143(1) of the Act by Asstt. DIT, CPC-Bengaluru [for short “CPC”] dt. 06/07/2020, for assessment year [for short “AY”] 2019-2020. ITAT-Pune Page 1 of 6 Supreme Equipments Private Limited
The solitary ground under the present appeal revolves around the allowability of deduction for ₹2,18,466/- claimed 36(1)(va) towards payment of employee’s contribution of provident fund [for short “EPF”] and ESI etc., for the impugned assessment year.
The brief facts emanating from records are that, the appellant assessee is a Company engaged in the business of manufacturing of poultry equipments, and for the AY 2019-20 filed its Income Tax Return [for short “ITR”] on 31/10/2019 declaring total income of ₹1,78,11,780/- as against the CPC processed the said ITR u/s 143(1) determining total income at ₹1,80,30,250/- by disallowing the payment of EPF & ESI paid beyond due date prescribed under relevant Act, but before filing of ITR u/s 139(1).
The assessee’s submission in an appeal before first appellate authority did not yield any relief, consequently the appellant company is before the Tribunal seeking reversal of disallowance contending the amendment to section 36(1)(va) is prospective in nature.
ITAT-Pune Page 2 of 6 Supreme Equipments Private Limited
The present appeal is delayed by 21 days and same is condoned in the light of Hon'ble Supreme Court decision in WP/3/2020, MA/665/2021 & MA/29/2022. In the absence of assessee, the ex-parte hearing was held, wherein the learned departmental representative [for short “DR”] without controverting the facts that, the appellant company has duly deposited EPF and ESI before the due date for filing the return of income u/s 139(1) of the Act, has relied upon the orders of authorities below for confirming the disallowance by pressing into service the explanation 1 & 2 to section 36(1)(va) of Finance Act, 2021.
After hearing to the rival contentions of both the parties; and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short “ITAT, Rules”] perused the material placed on records and duly considered the facts of the case in the light of settled legal position and the case laws relied upon by the appellant assessee as well the respondent revenue.
In reaching the adjudication, it is apt to quote from ITAT-Pune Page 3 of 6 Supreme Equipments Private Limited notes on clause 8 to finance bill, which reads as; Clause 8 of the Bill seeks to amend section 36. . . . . Sub-section (1) . . . . . Clause (va) . . . . . Explanation 1 to the said clause provides that for the purposes of this clause, "due date" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise.
It is proposed to insert Explanation 2 to clause (va) of sub-section (1) of the said section so as to clarify that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the “due date” under the said clause.
This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-2022 and subsequent assessment years. (Emphasis supplied)
The conjunctive reading of section 36(1)(va) r.w.s. 43B and the newly amended explanation 1 & 2 to section 36(1)(va), it shall be suffice to state that, the deduction towards payment of employee’s contribution to EPF/ESI etc., henceforth i.e. from AY 2021-2022 shall be allowed if same is deposited within the due date prescribed under ITAT-Pune Page 4 of 6 Supreme Equipments Private Limited 43B, resultantly the appellant’s claim of deduction made u/s 36(1)(va) r.w.s. 43B for the impugned AY falls anterior, thus protected by the decision of Hon’ble Apex Court in case of “CIT Vs Alom Extrusions Ltd.” reported in 319 ITR 306 and the jurisdictional High Court of Bombay in “CIT Vs Ghatge Patil Transport Ltd.”reported at 368 ITR 749.
In the light of aforesaid discussion, the impugned NFAC order is set-aside and Ld. AO / CPC is directed to allow the deduction u/s 36(1)(va) as claimed in the return of income filed.
Resultantly, the appeal of the appellant assessee is allowed in aforestated terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Monday 05thday of September, 2022. -S/d- -S/d- SS VISWANETHRA RAVI G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / PUNE ; दिन ांक / Dated : 05thday of September, 2022. ITAT-Pune Page 5 of 6 Supreme Equipments Private Limited आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT, Pune (Mh-India) 4. The CIT, Nashik (Mh-India) 5. दिभ गीय प्रदिदनदि,आयकर अपीलीय न्य य दिकरण, पुणे “ बी ” बेंच, पुणे / DR, ITAT, Pune “B” Bench ,Pune. 6. ग र्डफ़ इल / Guard File. आिेश नुस र / BY RDER, िररष्ठदनजीसदचि / Sr. Private Secretary आयकर अपीलीय न्य य दिकरण, पुणे / ITAT, Pune.
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