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Income Tax Appellate Tribunal, CHANDIGARH
Before: SMT. DIVA SINGH & SHRI VIKRAM SINGH YADAV
ORDER आदेश आदेश PER DIVA SINGH The present appeal has been filed by the assessee assailing the correctness of the order dated 12.11.2021 passed u/s 250 of the Income Tax Act, 1961 by the CIT(A) (NFAC i.e. National Faceless Appeal Centre) Delhi pertaining to 2019-20 assessment year on the following grounds :
1) That the ld. CIT(A) is not justified in confirming the disallowance of Rs. 1,52,276/- on account of late deposit of ESI/PF. 2) That without prejudice to the above ground of appeal the appellant disputes the quantum of disallowance. 3) That the appellant craves leave to add, amend or modify the grounds of appeal before disposal of appeal.
ITA-366/CHD/2021 A.Y. 2019-20 Page 2 of 4
At the time of hearing, no one was present on behalf of the assessee. However, considering the facts on record which are set out at page 2 para 4 of the impugned order namely; that the disallowance made at the assessment stage in regard to delayed payment of Employees’ PF/ESI Fund which was deposited beyond the due date applicable under the provisions of PF Act, however was filed before the due date of filing of the return of income u/s 139(1) of the Act was challenged in appeal before the CIT(A) who considering the amendment to Section 43B of the Act by way of Explanation-5 and Expenditure 2 to Section 36(1)(va) proceeded to sustain the addition.
The ld. DR relied upon the order.
We have heard the submissions and perused the material available on record. It is seen that in the present appeal, the assessee has only assailed the disallowance sustained by the CIT(A) vide his order passed u/s 250(6) of the Act amounting to Rs. 1,52,276/- on the grounds that the ESI & PF payments were not made within time as per the relevant Statute. The claim of the assessee that the payments were made before the due date of filing of the return u/s 139(1) was held to be not relevant. It is seen that the said issue as far as the present Forum is concerned, stands fully covered in favour of the assessee not only by the consistent orders of the various
ITA-366/CHD/2021 A.Y. 2019-20 Page 3 of 4 Benches of the ITAT namely; the order dated 03.08.2021 of the Delhi Benches in the case of Insta Exhibition Pvt. Ltd. Vs ACIT in ITA 6941/Del/2017; order dated 01.07.2021 of the Vs DCIT in but also consistent orders of the Chandigarh Bench. It is seen that all along the Co- ordinate Benches have held that the amendments to Sections 36(1)(va) and u/s 43B of the Income Tax Act effected by the Finance Act, 2021 is applicable prospectively and not retrospectively. While coming to the said conclusion, the Benches have relied upon and read from the Notes on Clauses at the time of introduction of the Finance Act, 2021 and have held that the amendment is applicable in relation to the assessment year 2021-22 and subsequent years and not retrospectively. Thus, in view of this legal position as considered by the Co-ordinate Benches and taking note of the decisions of the jurisdictional High Court in the case of CIT Vs Nuchem Limited ITA 323 of 2009 and CIT Vs Hemla Embroidery Mills Pvt. Ltd. (2014) 366 ITR 167 we are of the view that the additions cannot be made or sustained on the strength of the amendment effected by Finance Act, 2021 to Sections 36(1)(va)/43B of the Act as the legal position thereon is very clear. The departmental stand that it is clarificatory in nature has consistently been rejected. Thus,
ITA-366/CHD/2021 A.Y. 2019-20 Page 4 of 4 in the face of the clear legal position, as set out hereinabove, we find that the claim of the assessee is to be allowed in the year under consideration which is 2019-20 assessment year.
The impugned order, accordingly, is set aside and the AO is directed to delete the disallowance. The appeal of the assessee is allowed. Said order was pronounced in the Open Court in the presence of the parties.
In the result, the appeal of the assessee is allowed.
Order pronounced on 1s t April,2022.