S N Constructions, Pune V. CPC, Bengaluru

ITA 537/PUN/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 2918 (ITAT-PUNE)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 19-10-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SIDHARTH SINHA
• Section: 2; 43B; 139; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. / ITA No.537/PUN/2021 नधा रण वष / Assessment Year : 2017-18 M/s. S.N. Constructions, Flat No.14, S.No.255, Shivdham Complex, Pune-Solapur Road, Hadapsar, Pune 411 028 PAN : ACLFS0647N Vs. ACIT, CPC, Bengaluru (Appellant) Respondent) आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT (Appeals), National Faceless Appeal Centre (NFAC), Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) on 21-06-2021 in relation to the assessment year 2017-18. 2. The appeal is time barred by 61 days. The assessee has filed condonation application giving the reasons for the delay. I am satisfied with the same. The delay is condoned and the appeal is admitted for disposal on merits. Appellant by Shri Sidharth Sinha Respondent by Shri Rajesh Gawali Date of hearing 05-05-2022 Date of pronouncement 05-05-2022 ITA No. 537/PUN/2021 M/s. S.N. Constructions 2 3. The only issue raised in this appeal is against the confirmation of disallowance of late deposit of the employees’ share of EPF & ESI beyond the due date under the respective Acts but before the due date u/s 139(1) of the Act. 4. Briefly stated, the facts of the case are that the assessee late deposited a sum of Rs.1,51,284/-, being, contribution of the employees to EPF & ESI which has been tabulated at the penultimate page of the assessment order. The Assessing Officer (AO) made the disallowance, which came to be affirmed in the first appeal. 5. Having heard both the sides and gone through the relevant material on record, it is seen from the table drawn by the AO that even though the employees' share in the EPF & ESI contribution was deposited late but all such payments have been made before the due date u/s.139(1) of the Act. It is seen that the issue under consideration is no more res integra in view of the judgment of the Hon’ble Bombay High Court in CIT Vs. Ghatge Patil Transports Ltd. (2014) 368 ITR 749 (Bom.) in which it has been held that deduction for payment of employees’ contribution cannot be disallowed in case the contribution of employees’ ITA No. 537/PUN/2021 M/s. S.N. Constructions 3 share in the Welfare Funds got credited on or before the due date of filing the return as per section 139(1) of the Act. 6. 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, ESIC, etc is delayed by an employer beyond 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, 2017-18 is anterior to the amendment carried out with effect from A.Y. 2021-22, I hold that the position of law as set out by various Hon’ble High Courts including Ghatge Patil Transports Ltd. (supra) squarely applies to the facts and circumstances of the instant case thereby not warranting any disallowance as the amount in question was ITA No. 537/PUN/2021 M/s. S.N. Constructions 4 admittedly deposited before due date u/s 139(1) of the Act. The addition is therefore, directed to be deleted. 7. In the result, the appeal is allowed. Order pronounced in the Open Court on 05 th May, 2022. Sd/- (R.S.SYAL) उपा य / VICE PRESIDENT प ु णे Pune; दनांक Dated : 05 th May, 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(A), NFAC, Delhi 4. 5. The Pr.CIT concerned वभागीय त न ध, आयकर अपील!य अ धकरण, प ु णे “SMC” / DR ‘SMC’, ITAT, Pune; 6. गाड फाईल / Guard file. आदेशान ु सार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA No. 537/PUN/2021 M/s. S.N. Constructions 5 Date 1. Draft dictated on 05-05-2022 Sr.PS 2. Draft placed before author 05-05-2022 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. *