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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI
आदेश / ORDER
PER S.S. VISWANETHRA RAVI, JM :
This appeal by the assessee against the order dated 18-10-2021 passed by the National Faceless Appeal Centre, Delhi (‘NFAC’) for assessment year 2019-20.
The assessee raised six grounds of appeal amongst which the only issue emanates for our consideration is as to whether the CIT(A), NFAC, Delhi justified in confirming the disallowance u/s. 36(1)(va) of the Act to an extent of Rs.32,88,647/- on account of employee’s contribution to ESIC/PF in the facts and circumstances of the case.
3. We note that the assessee is a company engaged in the business of providing manpower facility services. The CPC, Bangalore vide intimation u/s. 143(1) of the Act made addition of Rs.32,88,647/- on account of disallowance u/s. 36(1)(va) towards delayed payment of employee’s contribution to provident fund. The assessee contended that the employee’s contribution towards PF has been paid before the due date of filing of return of income for A.Y. 2019-20 but however the CPC, Bangalore as well as CIT(A), NFAC, Delhi did not accept the submissions of assessee and the CIT(A), NFAC held that the assessee would be entitled to deduction only if the contribution to the employee’s welfare fund stood credited on or before the due date under the respective Act. We note that the NFAC by following the amendment made by Finance Act, 2021 to section 36(1)(va) of the Act found the submissions of assessee regarding deposit of employees contribution before the due date of filing return of income not acceptable. We note that the said amendment is applicable from 1st April, 2021 and since the assessment under consideration is A.Y. 2019-20, the amendment is not applicable on the facts in hand. We note that the CIT(A) did not dispute the same and it is evident from the impugned order that the assessee paid the employee’s contribution towards provident fund before the due date of filing of Income Tax Return. Therefore, the order of CIT(A) is not justified and it is set aside. Thus, the assessee is entitled for deduction and grounds raised by the assessee are allowed.
In the result, the appeal of assessee is allowed.
Order pronounced in the open court on 01st September, 2022.