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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR & SHRI WASEEM AHMED, ACCOUNTANT MEMEBR
ORDER PER MAHAVIR PRASAD, JM:
Both appeals have been preferred by the assessee against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (‘CIT(A)’ in short) vide Appeal Nos. CIT(A), Ahmedabad- 8/10050/2020-21 & CIT(A), Ahmedabad-8/100730/2020-21; respectively; & 226/Ahd/2021 [Vision Hospitality Services & Consultants Pvt. Ltd. Vs. DCIT] A.Y. 2018-19 & 2019-20 - 2 - both dated 31.07.2021 under s. 250 of the Income Tax Act, 1961 (the Act) concerning AYs. 2018-19 & 2019-20.
The grounds of appeal raised by assessee read as under:
“1. It is most humbly submitted that the impugned order dated 31.07.2021 passed under section 250 of the Income Tax Act, 1961 (for short "the Act") by Ld. Commissioner of Income Tax (Appeals) (for short "Ld. CST{A)")is bad, illegal and as such is rendered without appreciating the factual matrix of the case in proper perspective.
2. The Appellant submits that out of the disallowed expenditure in form of Employer's and Employee's contribution to PF/ESIC of Rs. 35,35128/-, the Ld. C1T(A) has partly allowed the expenditure to the extent of Rs. 18,96,310/- being he Employer's Contribution to PF/ESI while placing reliance on the CBDT Circular No. 22/2015 dated 17.12.2015. The Ld. CIT(A) while deducing to a finding as regards the interpretation of due date appearing in proviso to section 43B has however chosen to given it a very narrow and restricted interpretation. The Appellant had raised a specific ground before Ld. CIT(A) as regards the judicial views taken by the Hon'ble High Courts in the country that the due date appearing in proviso to section 43B has to be equated at par in connection with both Employer's and Employee's contribution to PF/ESI. Instead the reliance was placed by the CIT(A) on the judgment rendered by Hon'ble Gujarat High Court in the case of CIT v. Gujarat State Road Transportation Corporation. The Appellant fairly states that the aforesaid decision is subject matter of challenge before the Hon'ble Supreme Court in Civil Appeal No. 2831 of 2016 which is sub judice. Thus the Ld. CIT(A) has erred in dismissing the appeal qua the issue of Employee's contribution placing on anvil the findings in the said authority of the jurisdictional High Court.
Ld. CIT(A) has erred in law as well on facts in as much as by not considering the grace period of payments made by the Appellant to the respective funds. The Appellant by way of the figures appended in the tabular form in the appeal made an endeavor to bifurcate the due dates, grace period and actual dates respectively of the contributions that re made. The said ratio of allowing the Employee's contribution in the grace period has been laid down by Hon'ble Gujarat High Court in the case of Commissioner of Income Tax v. Amoli Organics (P.) Ltd. [(2014) 41 taxmann.com 149]. Thus the Ld. CIT(A) has erred in not allowing the expenditure to the tune of Rs. 7,82,32/- being the contribution affected within the grace period.
4. The Ld. CIT(A) has also referred to the provisions of the Finance Act, 2021 wherein the union legislature has thought fit to add a clarification with respect to the intermingled interpretation of sections 36(1)(va) and 43B. However, the Hon'ble Supreme Court and well as various High Courts in the Country has held that taxing statutes have to be construed prospectively nay roving over the assessments of the assessee retrospectively. The findings of the Ld. CIT(A) thus fails in as much as its reliance placed over the provisions of Finance Act, 2021, The Appellant thus submits that the impugned order of Ld. CIT(A) is in serious infirmity with settled principles of law and thus has patently erred in upholding the disallowance of Rs. 16,39,101/-.”
& 226/Ahd/2021 [Vision Hospitality Services & Consultants Pvt. Ltd. Vs. DCIT] A.Y. 2018-19 & 2019-20 - 3 - 3. After hearing the learned DR, we came to the conclusion that this matter is against the assessee in view of the order of the Hon’ble Gujarat High Court order in the case of CIT vs. GSRTC whereas in similar facts and circumstances matter has been decided against the assessee. The judgment of Hon’ble Gujarat High Court in the matter of CIT vs. GSRTC 366 ITR 170 wherein the appeal of the assessee was dismissed as under:
"Section 43B, read with section 36(1)(va) of the Income-tax Act, 1961 - Business disallowance — Certain deductions to be allowed on actual payment (Employees contribution) - Whether where an employer has not credited sum received by it as employees' contribution to employees' account in relevant fund on or before due date as prescribed in Explanation to section 36(1)(va), assesses shall not be entitled to deduction of such amount though he deposits same before due date prescribed under section 43B i.e., prior to filing of return under section 139(1) -Held, yes - Assesses State transport corporation collected a sum being provident fund contribution from its employees - However, it had deposited lesser sum in provident fund account — Assessing Officer disallowed same under section 43B -However, Commissioner (Appeals) deleted disallowance on ground that employees contribution was deposited before filing return - Whether since assessee had not deposited said contribution in respective fund account on date as prescribed in Explanation to section 36(1 )(va), disallowance made by Assessing Officer was just and proper - Held, yes [Para 8] [In favour of revenue]
However, learned DR pointed out that this matter with regard to PF & ESIC is pending before the Hon’ble Supreme Court for its consideration. So, in view of the above, we set aside this matter to the file of the AO as and when whatever will be the outcome of the Hon’ble Supreme Court the order with regard to PF & ESIC cases, same to be applied in this matter.
In the result, the appeal filed by the Assessee is allowed for statistical purposes.
Now, we come to for A.Y. 2019- 20.
ITA Nos. 225 & 226/Ahd/2021 [Vision Hospitality Services & Consultants Pvt. Ltd. Vs. DCIT] A.Y. 2018-19 & 2019-20 - 4 - 7. Since, the connected matter has been set aside to the file of A.O. by us for A.Y. 2018-19, in similar facts and circumstances, therefore, the same shall apply mutatis mutandis in for A.Y. 2019-20.
In the result, both captioned appeals filed by the assessee are allowed for statistical purposes.
This Order pronounced in Open Court on 11/05/2022
Sd/- Sd/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 11/05/2022 True Copy S.K.SINHA आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. राज�व / Revenue 2. आवेदक / Assessee 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त- अपील / CIT (A) 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड� फाइल / Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद ।