M/S. POLYBOND INDIA PVT.LTD,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CPC, BENGALURU

PDF · subscribers
ITA 724/PUN/2021Status: DisposedITAT Pune30 August 2022AY 2017-183 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 amendment to Section 36(1)(va) by the Finance Act, 2021, was not applicable to the assessment year 2017-18. Since the employee's contribution was paid before the due date of filing the return of income, the disallowance was not justified.

What were the facts?

The assessee company made delayed payments of employee's contribution to ESIC/PF. The CPC and CIT(A) disallowed the deduction, relying on an amendment to Section 36(1)(va) of the Income Tax Act. The assessee contended that the payments were made before the due date of filing the return of income.

What were the issues?

Whether the disallowance of deduction for delayed payment of employee's contribution to ESIC/PF is justified when the payment was made before the due date of filing the return of income for the relevant assessment year.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI INTURI RAMA RAO & SHRI S.S. VISWANETHRA RAVI

For Appellant: Shri Rushikesh Kelkar
For Respondent: Shri M.G. Jasnani

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

1.

This appeal by the assessee against the order dated 23-11-2021 passed by the National Faceless Appeal Centre, Delhi (‘NFAC’) for assessment year 2017-18.

2.

The assessee raised two 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 addition u/s. 36(1)(va) of the Act to an extent of Rs.8,01,203/- on account of delayed payment 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 manufacturing and trading of rubber moulded parts, metal bounded rubber parts and anti-vibration mouldings. The CPC, Bengaluru vide intimation u/s. 143(1) of the Act made addition of Rs.8,01,203/- 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. 2017-18 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. 2017-18, the amendment is not applicable on the facts in hand. We note that the assessee contended that the contribution to ESIC/PF was paid before due date of filing of return of income before the CIT(A) which is evident from para No. 8.3 of the impugned order and we find the CIT(A) did not dispute the same. Therefore, the order of CIT(A) is not justified and it is set aside. Thus, the grounds raised by the assessee are allowed.

4.

In the result, the appeal of assessee is allowed.

Order pronounced in the open court on 30th August, 2022.

More judgments on Section 36(1)(va)

All 6,054 judgments and leading authorities on Section 36(1)(va) →

Recent GST High Court judgments

Search GST case law →