Powerlink Engineers LLP, Nashik V. Assistant Commissioner of Income-Tax, Circle-2, Nashik

ITA 279/PUN/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 9202 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 22-06-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2; 43B; 139; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘B’ PUNE – VIRTUAL COURT BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA Nos.278 & 279/PUN/2021 नधा रण वष / Assessment Years : 2018-19 & 2019-20 Powerlink Engineers LLP, 3, Kathe Industrial Estate, Tigraniya Road, Dwarka, Nashik – 422 011 Maharashtra PAN : AASFP3938J Vs. ACIT, Circle-2, Nashik (Appellant) (Respondent) आदेश / ORDER PER BENCH : These two appeals by the assessee relate to the assessment years 2018-19 and 2019-12 involving a common issue. These are, therefore, clubbed for disposal on merits for the sake of convenience. 2. In the appeal for the assessment year 2018-19, the only issue raised is against the disallowance of Rs.5,25,409/- made by the AO towards Employees contribution to EPF/ESIC which was deposited belatedly but before the time limit prescribed u/s.139(1) of the Act. The ld. CIT(A) confirmed the disallowance in terms of section Appellant by Shri Pramod Shingte Respondent by Shri Piyush Kumar Singh Yadav Date of hearing 04-02-2022 Date of pronouncement 08-02-2022 ITA Nos. 278 & 279/PUN/2021 Powerlink Engineers LLP 2 36(1)(va) of the Act. Aggrieved thereby, the assessee has approached the Tribunal. 3. We have heard both the sides in Virtual Court and gone through the relevant material on record. It is an admitted position that the assessee did deduct employees’ share of EPF and ESI but paid the same after the due date under the respective legislations but before the time for filing return u/s 139(1) of the Act. In our opinion, this issue is no more res integra in view of several judgments allowing deduction u/s 36(1)(va) of employees’ share of contribution deposited after due date under the respective Acts but before the date prescribed u/s 139 of the Act. The Hon’ble Himachal Pradesh High Court in CIT vs. Nipso Polyfabriks Ltd. (2013) 350 ITR 327 (HP) has held that there exists no difference between employees or employer’s contribution and both are to be allowed as deduction if deposited before the due date. 4. At this juncture, it is relevant to mention that the Finance Act, 2021 has inserted Explanation 2 below section 36(1)(va) providing that the provisions of section 43B shall not apply for the purpose of determining the due date under this clause w.e.f. 01.04.2021. The effect of this amendment is that if the amount of employees’ contribution towards EPF, ESI, etc is delayed by an employer beyond ITA Nos. 278 & 279/PUN/2021 Powerlink Engineers LLP 3 the due date under the respective Acts, the disallowance will be called for notwithstanding the fact that it was deposited before the due date u/s 139 of the Act. The Memorandum explaining the provisions of the Finance Bill, 2021, provides that this amendment will take effect from 1 st April, 2021 and will, accordingly apply in relation to assessment year 2021-2022 and subsequent assessment years. Since the assessment year under consideration, namely, 2018- 19 is anterior to the amendment carried out with effect from A.Y. 2021-22, we hold that the position of law as set out by various Hon’ble High Courts including the one in CIT vs. Nipso Polyfabriks Ltd. (supra) squarely applies to the facts and circumstances of the instant case, thereby not warranting any disallowance since the amount in question was admittedly deposited before due date u/s 139(1) of the Act. The addition is therefore, directed to be deleted. 5. For the assessment year 2019-20, the position is similar. The assessee late deposited the employees’ share of contribution to EPF/ESI etc., amounting to Rs.2,10,940/-, which was disallowed by the AO. The ld. CIT(A) sustained the disallowance. 6. Having heard both the sides and gone through the relevant material on record, it is found as an admitted position that the facts and circumstances of this year are mutatis mutandis similar to those ITA Nos. 278 & 279/PUN/2021 Powerlink Engineers LLP 4 of the preceding year. Following the view taken hereinabove, we order to delete the addition. 7. In the result, both the appeals are allowed. Order pronounced in the Open Court on 08 th February, 2022. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 08 th February, 2022 Satish आदेश क त ल प अ े षत / Copy of the Order is forwarded to : 1. अपीलाथ / The Appellant; 2. यथ / The Respondent; 3. The CIT (Appeals), National Faceless Appeal Centre, Delhi 4. वभागीय त न ध, आयकर अपील य अ धकरण, प ु णे “B” / DR ‘B’, ITAT, Pune; 5. गाड फाईल / Guard file. आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA Nos. 278 & 279/PUN/2021 Powerlink Engineers LLP 5 Date 1. Draft dictated on 04-02-2022 Sr.PS 2. Draft placed before author 04-02-2022 Sr.PS 3. Draft proposed & placed before the second member -- JM 4. Draft discussed/approved by Second Member. -- JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *