NAROTTAM SINGH TANWAR,PITHAMPUR vs. THE NFAC, DELHI

HTa 3daly 3f8470T, sal <urudila, sclt IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE MS MADHUMITA ROY,_JUDICIAL MEMBER AND SHRI B.M__BIYANI ACCOUNTANT MEMBER alq 6 FR zputila } (Conducted through Virtual Court) ITA No.22 /Ind/2022 Ara 4E134 Assessment Year: 2018-19 FPI Shri Vivek Singhal DCIT_ CPC Indore Vs, Bangaluru (Appellant / Assessee) (Respondent/ Revenue) PAN: ADUPS9604H ITA No.25/Ind/2022 Assessment_Year: 2018-19 Satyendra Kumar Singh ITO 3(2) Indore Vs. Indore (Appcllant / Assessec) Respondent/ Revcnue) PAN: BMOPS3022D ITA No.17/Ind/2022 Assessment Year: 2019-20 Narottam Singh Tanwar Asst. Director CPC Indore Vs. (Appellant / Assessec) (Respondent / Revenuc) PAN: BBPPS4636F Assessec by Nonc Revenue by Shri PK. Singhi_ Sr , DR Date_0f Hearing 28.07.2022 Date of Pronouncement 29 0).2022 ITA No.22/1nd/2022 & others Shri Vivek Singhal & others A Y 2018-19 & 2019 40 RDER PER BM_BIYANLAMi are filed by different assessees against the respective 1 . These appeals passed by the learned Commissioner of Income-Tax (Appeal) ["Ld: orders CIT(AJ"] as per the following details: Assessmenl Date of CIT(A) s S.No. ITA No. 7 Assessce Year order ITANo.22 /Ind/2022/Vivek 2018-19 Singhal [TANo.25 /Ind/ 2022 / Salyendra 2018-19 Kumar Singh [TANo.22 / Ind/ 2022 / Narottam 2019-20 Singh Tanwar 17.12.2021 1 13.12.2021 2 22.12.2021 3 . 2. all these appeals is same except the As the issue involved in heard these appeals together and difference of amounts involved, wC proceed to decice the same by this common order: The rcturn ol income filed by assessee was processed by the Ld. AO 3 , Act alter making disallowance on account of delayed u/ $ 143(1) o the of emplovees contributions t0 Provident Fund/ Employees State payment (PF/ESI"). Being aggrieved by the disallowance SO made by Ld. M3Tdh Insurance Lo Ld. CIT(A): However, the Ld. CIT(A) #rQ- the assessec filed appeal { S Zroris) cohfirmed disallowance and dismissed thc appeal of the assessec the the order of Ld. CIT(A) the assessce has prelerred appeal before us. 741o Akain Ra Fur4 involved is related to the disallowance u/ s 4 The sole controversy the Act in respect of delayed payment of employee $ 36(1)(va) of contribulions t0 PF 1 ESI_ ITA No 22/lnd/2022 & others Shri Vivek Singhal & others A Y 2018-19 & 2019-20 Page 3 0f 7 Ao has made thc disallowance submitted that the Ld. 5 . Thc Ld AR not deposited the thc assessce had without appreciating that though the duc dates prescribed under contributions to PF' 7 ESI upto employees thc same 0 the asscsscc had deposited ESI laws, VCl the the PF of thc Acl i.c upto thc funds within the timc permitted u/s 43B respective income and hencc no thc return of u/s 139(1) for filing duc date decisions of Hon"ble High attracted in vicw of numerous disallowance is decisions relied upon by Ld. asscsscc. Some ol the Courts favouring the AR arc mentioned below: AIMII Limitedl (2010) 321 ITR 508 Hon 'blc Delhi High Court in 4dala (a) 3h Couri in Sagun Foundary PvtzY(AnViaria Hon 'blc Allahabad High 5 3 (b) 145 DTR 265 7461360 Court in CIT Vs. Rajasthan Stae Rajasthan High 71d (c) Hon ble Min72017) Rajasthan Statc Ganganagar Sugar Corporation Lid_ 7 250 Taxman 32 isSuc is also squarely covered in Ld . AR furthcr submitted that thc 5.1 B3ench of ITAT. scvcral decisions of this very favour Of the assessee by otherwisc thc impugncd submitted that cven 5.2 Ld. AR also the scopc of section in nature and outside disallowance is debatable and thereforc also no( invoked bv the Ld_ Ao 143(1)(iv) of the Act Bench in Mls: S.V. held by ITAT, Visakhapatnam sustainable; as VS. DCIT (ITA India (P) Limited Constructions Engineering order dated 23.09.2021 No. 130 /Viz/2021) the orders of lower authoritics: thc Ld. DR relied upon 6. Per contra, it has been held that once submittcd that in following decisions He further due dates under PF 1 ESI arc paid after the the employees' contributions has madc payments is attracted evcn if thc asscssce laws, disallowancc due date u/s 139(1} for filing allowed u/s 4313 i.e. upto the within thc time of return: ITA No 22/1nd/2022 & others Shri Vivek Singhal & others 4 Y 2018-19 & 2019- ^ Page 4 of (a) Hon 'ble Gujarat High Court in CIT vs. Gujarat State Road Transport Corporation, (2014) 41 taxmanncom 100 bl Hon 'ble Gujaral High Court in Pr . CIT VS. M/s Suzlon Energy Lld. (2020) 115 taxmann com 340 (c) Hon 'ble Kerala High Court in CIT Vs Merchem Ltd. (2015) 378 ITR 443 that the Finance Act, 2021 has also 6.1 Ld. DR further subraitted to Seclion 36(1)(va) and Explanation 5 to Scction inserted Explanation 2 43B as under: 017 " 3f 3RIA Section 36(1)va): 2.-For the removal of doubts, it is hereby SExplanation clarified that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of *n determining the "due date' under this clause; Section 43B: 5.-For the removal of doubts, it is hereby "Explanation clarified that the provisions of this section shall not apply and never to have been applied to a sum received shall be deemed of his employees to which the by the assessee from any provisions of sub-clause (x) of clause (24) of section 2 applies 6.2 Ld. DR submitted thal with the introduction of these amendments, il is very much clear thal the due dates specilied in section 43B shall nol the Ld. DR, thc impacl would bc such that if thc apply. According Lo contribulions are paid after the due dates under the PF 1 ESL employees' laws, disallowance would happen. The Ld. DR further submitted that the words shall be deemed never to have been applied appcaring in inserted Explanations clearly demonstrate that the these newly amendments, though inserted from 01.04.2021 are clarilicatory in nature and hence they would apply retrospectively. Therefore, according the Ld. DR the amendments are applicable Lo the assessment-vear involved in the ITA No.22/1nd/2022 & others Shri Vivek Singhal & others 2018-19 & 2019-20 present appeal too and hencc the disallowance made by Ld. AO is very much in accordance with the law. 7 _ We have considered thc rival contentions and submission of both sides and also peruscd the relevant materials available on rccord Beforc proceeding further WC would like t0 mention that thc assessec has deposited the impugncd contributions t0 the PF ESI though after due date under PF 7 ESI law but within thc timc allowed L 443k upto the duc date u/s 139(1) for filing rcturn of income and Kixren sp93sspute 5 On 4 this point by revenuc: 8 Regat rding the decisions relied upon by both 3do5 #eobservc thal 7ru 4A there are divergent vicws of Hon 'ble High Courts on thc allowability of employees' contributions to PF' ESI paid after duc dates under thc PF ESI laws but within the time allowed u/ s 43B. Whilc thc Ld, AR has relied upon various dccisions favouring l0 thc assessce. thc I.d _ DJR has quoted thc dccisions against the asscsscc: We arc also informed by bolh sidcs that therc is no decision of Hon'ble juri ictional High Court of Madhya Pradesh on this issue. In this situation, WC are mindlul of the decision in Vegetable Products Ltd. 88 ITR 192 whercin the Hon blc Supreme Couri has hcld that if tWO rcasonablc construclions of a taxing provision arc possible, that construction which favours the asscsscc musl be adopted. In view of this, the decisions favouring the assessec shall gct preferencc over thc decisions againsi thc asscsscc: Bcing So WC hold hat thc employces contributions paid aftcr due datc under PF ESI law bur within the timc allowed u/ s 43B, are allowable as deduction. 9 Rega rding the amendments made through Finance Act, 2021 il is specil fically mentioned by the lcgislaturc thal thc amendments are cffective from 01.04.2021. Further the Memorandum explaining the Provisions in the Finance Bill, 2021 clearly prescribes thus: ITA No 22/1nd/2022 & others Shri Vivek Singhal & others A Y 2018-19 & 2019- ^ Page 6 of (These amendments will take effect from Ist April, 2021 and to the assessment year 2021-22 and will accordingly apply subsequent assessment years Thus, the lcgislature itself has categorically stated that the amendments the assessment year 2021-22 and subsequent assessment shall apply lo Thercfore these amendments are nol applicable lo lhe assessment years: assessment-year 2021-22 i,e. nol applicable upto vcars preceding the 4aa 2020-21_ This has also been held so in several decisions assessment-year 0 0 yzr zur4j3 bf ITAT' Benches including lollowing: Nath B3iswas Vs. DCIT , ITA No. a) FTAT Kolkata in Harendra 2 #ITS 186/Kol/2021 for A.Y. 2019-20, order dated 16.07.2021 0& (b) ITAT Hyderabad in Salzgitter Hydraulics Private Limited Vs. ITO, ITA No. 644/Hyd/2020 for A.Y. 2019-20 order dated 15.06.2021 in Akbar Mohammad Vs. ACIT , CPC Bangalore ITA ITAT Jodhpur 2021 for A.Y. 2018-19 and 2019-20_ order No. 108 &109 / Jodh / dated 31.01.2022 (c) that this Bench has recently decided several 10. Il is also noteworthy hereunder, wherein the similar disallowance appeals, a few mentioned made by Ld_ AO has been deleted: Shri Virendra Kumar Tiwari Vs. CIT(A), ITA No. 175 Ind 7 2021 NFAC , order dated 30.03.2022 (a) M/s Prestige Fabricators Pvt. Ltd. Vs. ITA No_ 184 Ind 2021 ACIT-4(1), Indore order dated 30.03.2022 (b) Kamal Kumar Jain Vs. DCIT CPC ITA No. 223 Ind { 2021 Bangalorc , order dated 30.03.2022 (c) 11 _ discussion, we observe that employees In view of foregoing after due date under PF 7 ESI laws but contributions Lo PF 7 ESL paid within the timc allowed u/s 4313 ic. upto thc duc date 4/s 139(1) for filing No 22/lnd/2022 & others ITA Shri Vivck Singhal & others Y 2018-19 & 2019-20 A taxable income 0f deduction in computing is allowable as of return samc. Thcrefore the Ld. had rightly claimed thc business and the assesse claim of the nol justilied in disalloxuEH Ld. CIT(A) were 44 well as AO and AO as disallowancc @iade by thercfore delete thc 5 &R =urrqa asscsscc Wc confirmed by Ld. CIT(A): arc allowed. TITS In the result, these appeals 12 29,52,2022. ET.A.T. Rules 1963 on as pcr Rule 34 of Order pronounced 9-]= (1 (MADHUMITA ROY) Judicial Member 19 02_ 2022 Indore, pS (B.= M_ BHYANI) Accountant Member Patel/Sr. PS (1) The appellant Copies to: (2) The respondent CIT" {3 CIT(A) Departmental Representative (6) Guard File By order