Appeal Details
Counselvise Citation
[2021] 107 COUNSELVISE.COM (IT) 4068 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
04-10-2021
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2019-2020
Appeal Filed On
16-07-2021
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A, CHANDIGARH , ! ' # $ %! , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.176/CHD/2021 / ASSESSMENT YEAR : 2019-20 DIGIQAL SOLUTION SERVICES PVT. LTD., SCO 61, SECTOR 26, CHANDIGARH THE ASSISTANT DIRECTOR OF INCOME TAX, CPC, BENGALURU ITO, WARD-5(1), CHANDIGARH. ./PAN NO: AAGCD7856A /APPELLANT /RESPONDENT /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADV. ! / REVENUE BY : SMT.MEENAKSHI VOHRA, ADDL. CIT ' # $ /DATE OF HEARING : 26.08.2021 %&'( $ /DATE OF PRONOUNCEMENT : 04.10.2021 (HEARING THROUGH WEBEX) /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS), DELHI [(IN SHORT THE LD. CIT(A)] NA TIONAL FACELESS APPEAL CENTRE DATED 25.05.2021 RELATING TO ITA NO.114/CHD/2021 A.Y. 2 019-20 PAGE 2 OF 6 ASSESSMENT YEAR 2019-20, PASSED U/S 250 OF THE OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS A CT). 2. THE SOLITARY ISSUE IN THE PRESENT APPEAL RELATES TO THE ADDITION MADE IN THE INTIMATION MADE TO THE ASSESSE E ON ACCOUNT OF DELAYED PAYMENT OF ESI AND PF AMOUNTING TO RS.6,87,309/- BY INVOKING THE PROVISIONS OF SECTION 36(1)(V) OF THE ACT. THE LD.CIT(A) UPHELD THE ADDITION HOLDI NG THAT THE AMENDMENT EFFECTED BY THE FINANCE ACT, 2021 TO SECTION 43B OF THE ACT BY INSERTION OF EXPLANATION-5 AND SE CTION 36(1)(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 CLAI MING DEDUCTION OF THE SAID AMOUNT AS PER THE PROVISIONS OF SECTION 36(1)(VA) OF THE ACT WAS NOT GOVERNED BY SE CTION 43B STIPULATING THE DUE DATE TO BE TILL THE FILING OF R ETURN OF INCOME U/S 139(1) OF THE ACT MEANING THEREBY THE EMPLOYEES CONTRIBUTION TO ESI AND PF WAS TO BE PAI D BY DUE DATE SPECIFIED IN THEIR RESPECTIVE ACTS FOR THE PUR POSE OF CLAIMING DEDUCTION THEREOF. THE LD.CIT(A) HELD THAT THE SAID AMENDMENT THOUGH EFFECTED BY THE FINANCE ACT, 2021 BUT WHEN READ IN THE BACKGROUND OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF ALLIED MOTORS PVT. LTD. V S. CIT, 91 ITA NO.114/CHD/2021 A.Y. 2 019-20 PAGE 3 OF 6 TAXMAN, 205 (SC), THE INTENTION OF LEGISLATURE SET OUT THROUGH MEMORANDUM THROUGH THE FINANCE ACT WHILE INTRODUCING THE EXPLANATIONS TO SECTION MADE IT CLE AR THAT THE SAID AMENDMENTS WOULD APPLY TO ALL PENDING MATT ERS AS ON DATE. ACCORDINGLY, HE BRUSHED ASIDE THE CONTENTI ON OF THE LD.COUNSEL FOR THE ASSESSEE THAT THE ISSUE ALREADY STOOD DECIDED IN ITS FAVOUR BY THE HON'BLE JURISDICTIONAL HIGH COURT AND APPLYING THE AMENDMENTS TO SECTION 43B AN D SECTION 36(1)(VA) OF THE ACT DISALLOWED THE EMPLOYE RS CONTRIBUTION TO ESI AND PF NOT PAID BEFORE THE DUE DATE SPECIFIED IN THE SAID ACTS. 3. BEFORE US LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT VARIOUS BENCHES OF THE ITAT HAVE ALREADY ADJUDICATE D THIS ISSUE IN FAVOUR OF THE ASSESSEE. HE REFERRED TO THE DECISION OF THE ITAT, HYDERABAD BENCH IN THE CASE OF VALUE MOMENTUM SOFTWARE ; VS. DCIT IN ITA NO.2197/HYD/201 7, DATED 19.05.2021 AND THE DECISION OF ITAT CHANDIGAR H BENCH IN THE CASE OF HOTEL SURYA VS. DCIT IN ITA NO S.133 & 134/CHD/2021, DATED 05.08.2021. COPY OF THE ORDERS WAS PLACED BEFORE US. 4. THE LD. DR WAS UNABLE TO BRING ANY CONTRARY JUDG MENT TO OUR NOTICE, NOR WAS ANY DISTINGUISHING FACTS BRO UGHT TO ITA NO.114/CHD/2021 A.Y. 2 019-20 PAGE 4 OF 6 OUR NOTICE. HE HOWEVER RELIED ON THE ORDER OF THE C IT(A). 5. WE HAVE HEARD BOTH THE PARTIES. IT IS NOT DENIED THAT THE EMPLOYEES CONTRIBUTION TO ESI AND PF WAS ALLO WABLE AND CLAIMED AS DEDUCTION BY THE ASSESSEE ON THE STR ENGTH OF VARIOUS DECISIONS OF THE JURISDICTIONAL HIGH COURT HOLDING CONTRIBUTIONS DEPOSITED BY THE DUE DATE OF FILING O F RETURN OF INCOME U/S 139(1) OF THE ACT AS ALLOWABLE. THE REVE NUE HAS DISALLOWED THE SAME IN THE IMPUGNED YEAR BY APPLYIN G THE AMENDMENT MADE BY FINANCE ACT 2021 TO SECTION 36(1) (VA) AND 43B OF THE ACT ALLOWING THE CLAIM OF SUCH DEDUC TION ONLY WHEN PAID BY DUE DATES SPECIFIED IN THEIR RESPECT IVE ACTS, HOLDING THE AMENDMENT TO BE APPLICABLE ON ALL PENDI NG CASES POST THE AMENDMENT. 6. WE HAVE GONE THROUGH THE ORDERS OF THE COORDINAT E BENCHES OF THE ITAT CITED BY THE LD.COUNSEL FOR THE ASSESSEE BEFORE US AND ARE ALSO AWARE OF OTHER DECISIONS ALS O OF THE ITAT, DELHI BENCH IN THE CASE OF INSTA EXHIBITION P VT. LTD VS. ADDL.CIT IN ITA NO.6941/DEL/2017, DATED 03.08.2 021, THE DECISION OF ITAT, HYDERABAD BENCH IN THE CASE O F CRESCENT ROADWAYS PVT. LTD; VS. DCIT IN ITA NO.1952/HYD/2018, DATED 01.07.2021, CONSISTENTLY HO LDING THAT THE AMENDMENT TO SECTION 36(1)(VA) AND U/S 4 3B OF ITA NO.114/CHD/2021 A.Y. 2 019-20 PAGE 5 OF 6 THE ACT EFFECTED BY THE FINANCE ACT 2021 IS APPLICA BLE PROSPECTIVELY, READING FROM THE NOTES ON CLAUSES AT THE TIME OF INTRODUCTION OF THE FINANCE ACT, 2021, SPECIFICA LLY STATING THE AMENDMENT BEING APPLICABLE IN RELATION TO ASSES SMENT YEAR 2021-22 AND SUBSEQUENT YEARS. THEREFORE THE A DDITION, WE HOLD, CANNOT BE MADE ON THE STRENGTH OF THE AMEN DMENT EFFECTED BY FINANCE ACT 2021 TO SECTION 36(1)(VA)/4 3B 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 FO LLOWING CASES: 1) CIT VS. NUCHEM LIMITED, ITA NO.323 OF 2009 2) CIT VS. HEMLA EMBROIDERY MILLS PVT. LTD.(2014), 366 ITR 167 7. IN VIEW OF THE ABOVE, WE HOLD THAT THE CLAIM OF EMPLOYEES CONTRIBUTION TO ESI AND PF AS PER SECTION 36(1)(VA) OF THE ACT CANNOT BE DENIED IN THE IMPUGN ED 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) UP HOLDING THE SAID DISALLOWANCE TO THE TUNE OF RS. 6,87,309/- IS THEREFORE SET ASIDE AND THE AO IS DIRECTED TO ALLOW THE CLAIM ITA NO.114/CHD/2021 A.Y. 2 019-20 PAGE 6 OF 6 OF THE ASSESSEE.. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 4 TH OCTOBER 2021. SD/- SD/- ' # $ %! (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER &' /ACCOUNTANT MEMBER )' /DATED: 4 TH OCTOBER, 2021 * ! * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ' - / CIT 4. ' - ( )/ THE CIT(A) 5. +./ 0 , $0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35# / GUARD FILE &) ' / BY ORDER, / ASSISTANT REGISTRAR
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