Golden Eagle Security Services, Chandigarh V. DCIT-Circle-3(1), Chandigarh

ITA 223/CHANDI/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 5897 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Appeal Filed On: 09-09-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 139(1)

Judgement Text

आयकर य कर , य य “ए एए ए”, IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘A’, CHANDIGARH , ेख !"य एवं ए .के . ' र , य य)क !"य BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER आयकर अपील सं./ ITA Nos.223 & 224/Chd/2021 / Assessment Years : 2018-19 & 2019-20 Golden Eagle Security Services, SCO 2475-76, Sector 22-C, First Floor, Chandigarh. ब म The D.C.I.T., Circle 3(1), Chandigarh. ./PAN NO: AABFG0167B /Appellant /Respondent ! /Assessee by : Shri Ajay Jain, CA " ! / Revenue by : Dr.Ranjit Kaur, Sr.DR # $ % /Date of Hearing : 17.11. 20 21 &'() % /Date of Pronouncement: 22.12.202 1 (Hearing through Webex) आदेश/ORDER PER BENCH: B o t h t h e p re s e nt a p p e a l s h a ve b e e n fi le d b y t he s a me a s s e s se e a g a in s t t h e s e p a r a te o rde r s o f t he C o mmi s si o ne r of I nc o me Ta x ( A p p e a l s ) , N a t io na l F a c e le s s A p p e a l C e ntre (N F A C ), D e l hi , (i n s h o r t re fe r re d t o a s CI T(A ) d a t ed 02 . 0 8. 2 02 1 a n d 0 6 .0 8 . 20 2 1 r e la t i ng t o A . Ys . 2 0 18 - 1 9 & ITA Nos.223 & 224/Chd/2021 A.Ys. 2018-19 & 2019-20 Page 2 of 6 2 20 1 9 - 2 0 r e s pe c t iv e ly , pa s se d u /s 2 5 0 (6 ) o f t he I nc ome Ta x A c t ,1 9 6 1 ( he re ina f t e r re fe rre d t o a s “ A c t ” ) . 2. Th e s o l i t a r y i s s u e i n t he p re s e nt a p pe a ls re l a te s to t he a dd i t i o n ma d e t o t he i n c o me o f t he a s se s se e i n t he in t i ma t i o n ma de u /s 1 4 3 (1 ) o f t h e A c t , b y dis a ll o w ing de la y e d p a y me nt s o f e mp lo y e e s c o n t r ib u t io n t o E SI an d P F a mo u n t i ng t o R s . 1 3 ,0 5 ,1 1 0 /- (i n I TA N o .2 2 3 /C h d /2 0 21) & R s . 1, 0 7 ,2 4 ,2 4 0 /- ( i n I TA N o .2 2 4 / C hd /2 0 21 ) b y i nv o ki n g t he pr o v is io ns o f s e ct io n 36 ( l )( v a ) o f t h e A c t . 3. Th e Ld .C I T(A ) u p he ld t he a dd i t i o n r e l y in g u p o n va ri o u s de c i s i o ns o f t he I TA T a n d Ho n ’ b l e H ig h C o u r t s an d a ls o o n t he b a s is o f t he a me n dme nt e f fe c t e d b y t he F in a n c e A c t , 20 2 1 , t o s e c t i o n 4 3 B o f t he A c t b y i n s e r t i o n o f E x pla na t i o n - 5 a nd t o se c t i o n 3 6 ( l) ( v a ) o f th e A c t b y in se rt io n of E x p la n a t i o n - 2, b o t h t o t h e e f fe c t t h a t d u e da t e fo r p a y me nt o f e mp lo y e e s ' c o nt r i b u t i o n t o E SI a n d PF , fo r t he pu r p o s e o f c l a imi n g d e d u c t i o n o f t he s a i d amo u n t a s p e r t h e pro v is io ns o f s e c t i o n 36 ( l )( v a ) o f t he A c t w a s n o t g o v e r n e d b y s e c t i o n 43 B s t i pu l a t in g t he d ue da t e t o b e t i l l t he fi l in g o f r e t u r n o f in c o me u /s 1 3 9 (1 ) o f t he A c t , me a ni n g t he r e b y t he e mp lo y e e s ' c o nt r ib u t io n t o E SI a n d P F w a s t o b e p a id b y d u e ITA Nos.223 & 224/Chd/2021 A.Ys. 2018-19 & 2019-20 Page 3 of 6 3 da t e s pe c if ie d in t h e i r re s pe c t iv e A c t s f o r t he p u rp o s e of c l a imi n g d e d u c t i o n t he re o f. Th e Ld .C I T(A ) he ld t h a t t he s a id a me nd me nt t o b e c l a ri f ic a t o r y and he nc e re t r o s pe c t ive in a pp l ic a t i o n. Acc ordingly, the conte ntio n of the Ld.Counse l fo r the assessee tha t the iss ue alre ady sto od de cided in its fav our by the Hon'ble Jurisdictio nal High Court in t he case of CI T vs. Rai Agro Industries(2011) 334 I TR 122(P&H) & CIT vs He mla Embroidery Mills (P) Ltd(2014) 366 I TR 167(P&H), was brushe d as ide and the addition u phe ld. 4. Th i s i s s u e h a s b e e n de a l t w it h a nd a d j u d i c a t e d b y t h e I TA T in a nu mb e r o f c a s e s , c o ns is t e n t l y ru l in g i n fa v o u r o f t he a s s e s s e e , h o ldi n g t h a t t h e a me nd me n t t o se c t io n 4 3B o f t he A c t b y i n se r t io n o f E x p la n a t i on - 5 a nd t o se c t i on 3 6 (l ) (v a ) o f t h e A c t b y in se r t i o n o f E x p la na t i o n - 2 ,b y t h e F ina n c e A c t 20 2 1 is pr o s p e c t iv e a nd t he i s s ue o t he r wi se s t a nd s d e c ide d by t h e j u ri s d i c t io n a l h ig h c o u r t in f a v o u r o f t h e as s e s s e e . I n t he c a se o f A j a y P ip l a ni V s A s s i s t a n t Di r e c t o r o f Inc o me Ta x , C PC , B e n g a l u r u i n I TA N o . 1 1 4 /C H D /20 2 1 o r d e r d a te d 04 . 10 . 2 02 1 t h e is s u e h a s be e n a dju d ic a t e d a t p a ra 5 t o 7 o f t he o r de r a s u n de r : “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 ITA Nos.223 & 224/Chd/2021 A.Ys. 2018-19 & 2019-20 Page 4 of 6 4 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. Hernia 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(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.” O n s i mil a r l in e s t he i s s u e h a s be e n a d ju d ic a te d in fa v o u r o f t h e a s se s se e in t he c a se o f M /s . Ju p i t e r A q u a Lin e s P v t . Lt d v s DC I T, C i r c l e 6( 1 ) Mo h a l i i n I TA N o .8 3 /C h d /2 0 2 1 d a t e d 27 t h A u g us t 2 0 2 1 . 5. I n v ie w o f t he a fo r e s t a te d de c i s i o n s o f t h e I TA T, t he re fo re t he c ont e n t io n o f t he Ld .D R b e f o r e u s t hat t he ITA Nos.223 & 224/Chd/2021 A.Ys. 2018-19 & 2019-20 Page 5 of 6 5 a me nd me nt t o s e c t io n 3 6 (1 ) ( v a ) o f t h e A c t is re t r o sp e c t i v e is di s mi s s e d . A ls o s in c e n o fa c t s d i s t i ng u i s h in g t h e pre se n t c a s e s f r o m t h o se d e c i de d b y t he I TA T ha v e be e n po int e d o u t by t h e Ld .D R b e fo re u s a n d a d mi t t e d l y t he a mo u nt s o f e mp lo y e e s ’ c o nt r ib u t i o n t o E SI a nd PF s t o o d p a i d b efo re t he du e d a te o f fi lin g o f r e t u r n o f i nc o me , t he i s s u e of di s a l l o w a nc e o n a c c o u nt o f de la y e d p a y me nt s o f e mp l o y e e s’ c o n t r ib u t io n t o E S I a n d P F i s s q u a r e l y c o ve re d b y the a fo r e s a i d de c i s i ons , fo l l o w in g w h ic h t h e d i s a l l o w anc e ma d e o f E S I /P F e mp l o y e e s ’ c o n t r i b u t i on u /s 3 6 ( 1 )( v a ) a mou n t i ng t o R s .1 3 ,0 5 , 11 0 /- ( in I TA N o . 2 23 /C h d /2 0 2 1 ) & R s . 1, 0 7 ,2 4 ,2 4 0 /- ( i n I TA N o .2 2 4 / C hd /2 0 21 ) i s d e l e te d . 6. I n t he r e s u l t , bo t h t h e a pp e a ls o f t he a s s e s s e e a re a ll o w e d . O r de r p r o n o u n c e d i n o p e n c o u r t a t t h e c o n c l u s i o n o f h e a r i n g o n 2 2 / 1 2 / 2 0 2 1 . Sd/- Sd/- एन.के . ' न (N.K. CHOUDHRY ) (ANNAPURNA GUPTA) )क !" /Judicial Member लेख !" /Accountant Member +!न %क /Dated: 22/12/2021 * ी* ITA Nos.223 & 224/Chd/2021 A.Ys. 2018-19 & 2019-20 Page 6 of 6 6 ' * + , - , / Copy of the order forwarded to : 1. / The Appellant 2. / The Respondent 3. # . / CIT 4. # . ( )/ The CIT(A) 5. , / 0 1 , % 1 , 234 05/ DR, ITAT, CHANDIGARH 6. 0 4 6 $ / Guard File ' * # स / By order, सह ंज / Assistant Registrar