SATISH JAYNARAYAN MUNDADA,PUNE vs. CENTRAL PROCEEDINGS CENTRE (CPC), BANGALORE

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ITA 495/PUN/2021Status: HeardITAT Pune23 June 2022AY 2019-203 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the disallowance was not justified as the employees' contributions were deposited before the due date of filing the return of income. The amendment by Explanation (1) to Section 36(1)(va) of the Act, inserted by the Finance Act, 2021, was not applicable to the assessment year in question.

What were the facts?

The assessee's appeal concerns the disallowance of Rs. 83,193/- for delayed deposit of employees' PF/ESI contributions for AY 2019-20. The disallowance was confirmed by the CIT(A).

What were the issues?

Whether the disallowance of employees' contribution to PF/ESI deposited after the due date but before the filing of the return of income is justified for AY 2019-20, considering the applicability of subsequent amendments.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 143(1),Section 139(1),Section 43B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, PUNE

Before: SHRI R.S. SYAL & SHRI S.S. VISWANETHRA RAVI

For Respondent: Shri M.G. Jasanani

आदेश / ORDER

PER S.S. VISWANETHRA RAVI, JM :

1.

This appeal by the assessee against the order dated 28-09-2021 passed by the National Faceless Appeal Centre (NFAC), Delhi for assessment year 2019-20.

2.

We find no representation on behalf of the assessee nor any application filed seeking adjournment. The assessee called absent and set ex-parte. Therefore, we proceed to hear the Ld. DR and pass order on the basis of material evidence on record.

3.

The only issue is to be decided is as to whether the CIT(A) justified in confirming the disallowance made by the CPC, Bangalore on account of delay in depositing employees‟ contribution to PF/ESI in the facts and circumstances of the case.

4. We note that the AO, CPC disallowed Rs.83,193/- u/s 36(1)(va) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟) vide intimation u/s 143(1) of the Act. Before the CIT(A), it was contended that the said amount was paid before filing of return of income u/s 139(1) and no disallowance is warranted. The CIT(A) confirmed the said disallowance by holding that the provisions u/s 43B are not applicable. It is not disputed by the ld. DR that the said employees‟ contributions to PF/ESI were deposited before the due date of filing the return of income, which is also evident from para No.5 of impugned order. We note that Explanation (1) was inserted to clause (va) of sub-section (1) of section 36 of the Act w.e.f. 01.04.2021, wherein the definition of due date is defined making it clear that the assessee is required as an employer to credit employees‟ contribution to the employees account in the relevant fund under any Act, Rule, Order or Notification issued therein or under any Standing order, Award, Contract of service or otherwise. Admittedly, the assessment year under consideration is 2019-20 and in our opinion, the said amendment by way of Explanation inserted by the Finance Act, 2021 is not applicable. Therefore, the disallowance as confirmed by the CIT(A) is not justified.

Thus, it is set aside by holding that the assessee is entitled to get deduction. Thus, the grounds raised by the assessee are allowed.

4.

In the result, appeal of assessee is allowed.

Order pronounced in the open court on 23rd June, 2022.

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