JAGANNATH CORPORATION PROJECTS PRIVATE LIMITED,BHUBANESWAR vs. CIT (A), NFAC, DELHI

Shri Tarun Kumar Agarwal, ld Shri Tarun Kumar Agarwal, ld AR appeared for the assessee and Shri AR appeared for the assessee and Shri S.C.Mohanty, ld Sr DR appeared for the revenue. S.C.Mohanty, ld Sr DR appeared for the revenue.

Both the appeals are barred by limitation by 186 days. The assessee has filed condonation petitions stating that the assessee had no knowledge about passing of order by the ld CIT(A), NFAC, Delhi. However, after browsing the income tax portal on 14.4.2021, the assessee came to know that the orders in both the assessment years have been passed and as such, appeals could have been filed on or before 31.10.2021. It is stated that due to fact that there was no intimation about the passing of orders, the assessee could not file the appeals within the stipulated period. It is also stated that the delay in filing of the appeals is neither deliberate nor intentional but due to introduction of new Faceless Assessment.

After going through the condonation petitions, we find that the assessee had reasonable cause for not filing the appeals within the stipulated time. We, therefore, condone the delay of 186 days in filing the appeals before the Tribunal and admit the appeals for hearing.

The sole issue involved in both the appeals is against the confirmation of disallowance of Rs.12,42,472/- and Rs.17,61,598/- u/s.43B of the Act in respect of the delay in payment of PF & ESI under the respective Acts but paid before the due date of filing of the return for the assessment years 2018-19 & 2019-10, respectively.

It was the submission that the disallowance has been made holding that there has been an amendment to Section 36(1)(va) by the Finance Act,

In reply, ld. Sr. DR vehemently supported the orders of the AO and CIT(A). The ld. Sr. DR submitted that the amendment made by the Finance Act, 2021 had to be read retrospectively, insofar as the Hon’ble Supreme Court in the case of Podar Cement (P) Ltd., [1997] 226 ITR 625 (SC) has held that such amendment done in respect of the provisions of Section 22 to 27 of the Act was declaratory and had retrospective operation. He also placed reliance on the decision of the Hon’ble Supreme Court in the case of Gold Coin Health Food (P) Ltd. (2008) 304 ITR 308 (SC) to submit that the introduction Explanation 2 to Section 36 (1)(va) of the I.T.Act, 1961 and Explanation (v) to Section 43B of the Act were to read retrospective. It was also submitted by the ld. Sr. DR that the memorandum itself says that the

We have considered rival submissions. In respect of retrospective/prospective operation of the amendment by the Finance Act, 2021, the issue is now settled by the decision of the Hon’ble Delhi High Court in the case of TV Today Network Ltd., in ITA No.227 of 2022, vide judgment dated 27.07.2022, wherein the Hon’ble High Court has categorically held that the amendment to section 36(1)(va) by the Finance Act, 2021 is to operate prospectively. In the present case it is noticed that the issue is with regard to allowability of PF and ESIC paid beyond the prescribed date but within the due date of filing of return, therefore, the same is allowable. This being so, respectfully following the principles laid down by the Hon’ble Delhi High Court in the case of TV Today Network Ltd.,(supra), and also the decision of the Co-ordinate Bench of this Tribunal in the case of Odyssey Motors Pvt Ltd., (supra) and Sunila Sahu (supra), the addition as made by the AO and confirmed by the CIT(A) in both the appeals stands deleted.

In the result, both appeals of the assessee stand allowed.