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आदेश/Order
The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, (in short referred to as CIT(A) dated 21.11.2021 relating to A.Y. 2018-19, passed u/s 250 of the Income Tax Act,1961(hereinafter referred to as “Act”).
A perusal of the record shows that there is a delay of 11 days in filing the appeal before the Tribunal. The assessee has filed an application for condonation of delay in filing the appeal. The contents of the said application are reproduced hereunder :
The Hon'ble Bench, Income Tax Appellate Tribunal, Chandigarh Benches, Chandigarh
ITA No. 23/Chd-2022 A.Y. 2018-19 Page 2 of 5
Subject: - Request regarding Condonation of Delay Reference: - Appeal No. ITA23/CHANDI/2022 - In the case of Ashmi Gupta, A.Y. 2018-19
Respected Sir, The Hon'ble Commissioner of Income Tax (Appeals), National Faceless Assessment Centre, Delhi has passed the order on 21.11.2021 i.e. Sunday Therefore the appeal was required to be filed before your honour by 24.01.2022. The appeal is filed on 31.01.2022, thus there is a delay of 11 days in filing the appeal, as the concerned person in the office of our Chartered Accountant was on suffering from suspected Covid. This delay is purely on account of preparing the appeals without having any mala-fide intention, thus requested to condone the delay. We are filing the Affidavit in this regard. Submitted Yours faithfully, Sd/- (Ashmi Gupta) Assessee 3. Ld. DR had no objection to the condonation of delay.
I have heard the rival contentions and gone through the application
for condonation of delay. In view of the aforesaid facts and circumstances, I
am convinced that the delay in filing the appeal is un-intentional but due to
the aforesaid factors as pleaded above. In view of this, the delay in filing of
the appeal is hereby condoned and now I proceed to decide the appeal on
merits.
The solitary issue in the present appeal relates to the addition made to
the income of the assessee in the intimation made u/s 143(1) of the Act, by
disallowing delayed payments of employees contribution to ESI and PF
amounting to Rs.407,240/- by invoking the provisions of section 36(l)(va) of
the Act.
ITA No. 23/Chd-2022 A.Y. 2018-19 Page 3 of 5
The Ld. Commissioner of I.Tax (A) upheld the addition on the basis of
the amendment effected by the Finance Act, 2021, to section 43B of the Act
by insertion of Explanation-5 and to section 36(l)(va) of the Act by insertion
of Explanation-2, both to the effect that due date for payment of employees'
contribution to ESI and PF, for the purpose of claiming deduction of the said
amount as per the provisions of section 36(l)(va) of the Act was not governed
by section 43B stipulating the due date to be till the filing of return of
income u/s 139(1) of the Act, meaning thereby the employees' contribution
to ESI and PF was to be paid by due date specified in their respective Acts
for the purpose of claiming deduction thereof. The Ld.CIT(A) held that the
said amendment to be clarificatory and hence retrospective in application.
Accordingly, the contention of the Ld. Counsel for the assessee that the
issue already stood decided in its favour by the Hon'ble Jurisdictional High
Court in the case of CIT vs. M/s Lakhani Rubber Udyog (P) Ltd ITA No.215
of 2010 dt 22.09.2015 & CIT vs Nuchem Ltd (2015) 371 ITR 164(P&H), was
brushed aside and the addition upheld.
This issue has been dealt with and adjudicated by the ITAT in a
number of cases, consistently ruling in favour of the assessee, holding that
the amendment to section 43B of the Act by insertion of Explanation-5 and
to section 36(l)(va) of the Act by insertion of Explanation-2,by the Finance
Act 2021 is prospective and the issue otherwise stands decided by the
jurisdictional high court in favour of the assessee. In the case of Ajay Piplani
Vs Assistant Director of Income Tax, CPC, Bengaluru in ITA No.
ITA No. 23/Chd-2022 A.Y. 2018-19 Page 4 of 5
114/CHD/2021 order dated 04.10.2021the issue has been adjudicated at
para 5 to 7 of the order as under :
“5. We have heard both the parties. It is not denied that the employees contribution to ESI and PF was allowable and claimed as deduction by the assessee on the strength of various decisions of the jurisdictional High Court holding contributions deposited by the due date of filing of return of income u/s 139(1) of the Act as allowable. The Revenue has disallowed the same in the impugned year by applying the amendment made by Finance Act 2021 to section 36(l)(va) and 43B of the Act allowing the claim of such deduction only when paid by due dates specified in their respective Acts, holding the amendment to be applicable on all pending cases post the amendment. 6. We have gone through the orders of the coordinate Benches of the ITAT cited by the Ld.Counsel for the assessee before us and have noted that it has been consistently held that the amendment to section 36(l)(va) and u/s 43B of the Act effected by the Finance Act 2021 is applicable prospectively ,reading from the Notes on Clauses at the time of introduction of the Finance Act, 2021, specifically stating the amendment being applicable in relation to assessment year 2021-22 and subsequent years. Therefore the addition, we hold, cannot be made on the strength of the amendment effected by Finance Act 2021 to section 36(l)(va)/43B of the Act. Moreover it is an admitted position that the jurisdictional High Court has in various decisions held that employees contribution to ESI & PF is allowable if paid by the due date of filing return of income u/s 139(1) of the Act. The jurisdictional High Court has held so in the following cases: 1) CIT Vs. Nuchem Limited, ITA No.323 of 2009 2) CIT Vs. Hemla Embroidery Mills Pvt. Ltd.(2014), 366 ITR167 7. In view of the above, we hold that the claim of employees contribution to ESI and PF as per section 36(l)(va) of the Act cannot be denied in the impugned year, i.e. 2019-20 on the basis of amendment made to the section by Finance Act 2021. The order of the Ld.CIT(A) upholding the said disallowance to the tune of Rs. 18,21,088/- is therefore set aside and the AO is directed to allow the claim of the assessee.” On similar lines the issue has been adjudicated in favour of the
assessee in the case of M/s.Jupiter Aqua Lines Pvt. Ltd vs DCIT,Circle 6(1)
Mohali in ITA No.83/Chd/2021 dated 27th August 2021.
In view of the aforestated decisions of the ITAT, therefore the
contention of the Ld.DR before me that the amendment to section 36(1)(va)
ITA No. 23/Chd-2022 A.Y. 2018-19 Page 5 of 5
of the Act is retrospective is dismissed. Also since no facts distinguishing
the present cases from those decided by the ITAT have been pointed out by
the Ld.DR before me and admittedly the amounts of employees’ contribution
to ESI and PF stood paid before the due date of filing of return of income,
the issue of disallowance on account of delayed payments of employees’
contribution to ESI and PF is squarely covered by the aforesaid decisions,
following which the disallowance made of ESI/PF employees’ contribution
u/s 36(1)(va) amounting to Rs. 407,240/- is deleted.
In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 11th April, 2022.
Sd/-
( SANJAY GARG) �या�यक सद�य/ Judicial Member “Poonam.” आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकरआयु�त/ CIT 3. आयकरआयु�त (अपील)/ The CIT(A) 4. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड�फाईल/ Guard File 6.
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar