PRAKASH DHONDIRAM KOLI,KOLHAPUR vs. DEPUTY COMMISSIONER OF INCOME-TAX, CPC, BENGALURU

This appeal by the assessee against the order dated 19-08-2021 passed by the National Faceless Appeal Centre (NFAC), Delhi for assessment year 2019-20.

The only issue is to be decided is as to whether the CIT(A) justified in confirming the disallowance made u/s 36(1)(va) of the Income-tax Act, 1961 (hereinafter referred to as „the Act‟).

We note that the Assessing Officer (AO), CPC, Bangalore disallowed Rs.24,74,849/- on employees‟ contribution u/s 36(1)(va) of the Act for not depositing within specified time under the relevant Acts. We note that the CIT(A) found the said amount was paid by the assessee before the due date of filing the return of income vide para 8 of the impugned order, but however, confirmed the disallowance made by the AO, CPC, Bangalore taking into account the recent amendment. 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.

In the result, appeal of assessee is allowed.