Assistant Commissioner OF Income Tax Central Circle3-(1), Hyderabad V. Ramky Energy and Environment Ltd, Hyderabad

ITA 775/Hyd/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 1056 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2022
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: DB-A
• Assessment Year: 2014-2015
• Appeal Filed On: 13-12-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K P R R MURTY
• Keywords: Depreciation; Additional depreciation; Question of law; Tax effect; Revised return; Set aside
• Section: 43B; 139; 139(5); 10B; 80IA; 143(2); 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD ‘A’ BENCH, HYDERABAD. BEFORE SHRI RAMA KANTA PANDA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA Nos.774 & 775/Hyd/2020 (Assessment Years : 2013-14 & 2014-15) Dy. Commissioner of Income Tax, Circle 3(1), Hyderabad. Vs. M/s. Ramky Energy and Environment Limited, Hyderabad. PAN AADCR 3002K Appellant Respondent Appellant By : Shri Vishal Kalra, CA Respondent By : Shri K P R R Murty, (D.R) Date of Hearing : 19.07.2022. Date of Pronouncement : 30.08.2022 O R D E R Per Shri Laliet Kumar, J.M. : These two appeals filed by Revenue are directed against separate orders both dt.16.03.2020 of the learned Commissioner of Income Tax (Appeals)-9, Hyderabad relating to Assessment Year 2013-14 & 2014-15. Since identical grounds are involved in both the appeals, we deal with ITA No.774/Hyd/2020 as the lead case for the sake of convenience and brevity. The same decision shall apply for ITA No.775/Hyd/2020. 2 ITA Nos.774 & 775/Hyd/2020 2. The grounds raised by the assessee in ITA No.774/Hyd/2020 are as under : “ 1. CIT (A) erred in allowing deduction claimed of assessee u/s. 80IA(4) wrt Bio Medical waste treatment facility at Salem, Mangalore in spite of fact that assessee has not entered in to agreement with Central Government of state Government or Local Authority or any other Statutory body for any developing, operating and maintaining the infrastructure facility as required u/s 80IA(4)(i) of IT Act. 2. CIT(A) erred in holding that approval of prescribed authority is sufficient to allow deduction erred in directing AO to allow deduction without verifying whether consent to operate the common facility for the period under consideration is brought on record wrt Mangalore unit or not. 3. CIT(A) erred in holding that approval of prescribed authority is sufficient to allow deduction erred in direction AO to allow deduction without verifying whether consent for operation of existing facility under section 25 of Water (prevention and control of Pollution Act), 1974 and Section 21 of Air (Prevention and control of pollution) Act, 1981 for the entire period under consideration is brought on record wrt both units under consideration or not. 4. CIT(A) erred in holding that approval of prescribed authority is sufficient to allow deduction erred in directing AO to allow deduction without noticing the fact that initially "consent to establish' Bio medical waste treatment facility at both Salem, Mangalore was taken by company named M/s. Medicare Incin Pvt Ltd whereas assessee company ended up operating the facility and no documents with regard to transfer of ownership of facilities have been filed before AO. 5. Whether, the facts and circumstances of the case, the Ld. CIT(A) is correct in directing the AO to delete the addition of Rs. 31,632/- pertaining to the late payments of the employees contribution to Provident Fund & ESI if the payments were made after the due date under stipulated acts but before filing of return of income? 6. Any other ground(s) that may be urged at the time of hearing.” 3. The facts, in brief, are that the assessee company is engaged in the business of Bio-Medical & Municipal Solid Waste Management, filed its Return of Income for the Assessment Year 2013-14 on 30.09.2013 declaring a total income of Rs.7,31,785. The case was selected for scrutiny 3 ITA Nos.774 & 775/Hyd/2020 by CASS on AST and the same was converted into scrutiny by issuing notice u/s. 143(2) of the Income Tax Act, 1961 (in short ‘the Act’). In response to the notice issued, the learned Authorised Representative has furnished certain material and books of account. A show cause notice was issued to the assessee to explain the deduction claimed u/s. 80IA of the Act. After examining the details submitted by the assessee, the Assessing Officer disallowed the deduction claimed u/s. 80IA(4) of the Act stating that the assessee has not fulfilled the conditions in respect of bio medical waste management at Mangalore and Salem units. The Assessing Officer held that the assessee company is not eligible to claim exemption u/s. 80IA of the Act. The Assessing Officer has also disallowed the amount received by the assessee from its employees as contributions to Provident Fund or Superannuation fund and not remitted within the stipulated period, part of the amount which the assessee has failed to remit the amount of Rs.31,632 (Rs.1,46,290 – Rs.1,14,658) claimed u/s. 36(1)(va) of the Act. Aggrieved by the order of Assessing Officer, the assessee filed an appeal before the learned CIT (Appeals). 3.1. After examination of assessee's submission, the learned CIT (Appeals) allowed the appeal of the assessee stating that the units at Mangalore and Salem constitute infrastructure facility for the purpose of section 80IA(4) of 4 ITA Nos.774 & 775/Hyd/2020 the Act. Further he held that these facilities have been developed and operated with due consent/agreement of the prescribed authorities who issued the necessary approvals/orders. So far as the disallowance made by the Assessing Officer of Rs.31,632 u/s. 36(1)(va) of the Act is concerned, the learned CIT (Appeals) held that by relying on the orders of ITAT in the case of M/s. Nuzivedu Swati Costal Consortium and order passed by CIT(A)-2, Hyderabad in the case of M/s. Golden Star Facilities, dt.29.02.2016, allowed the claim of deduction u/s. 43B of the Act. He directed the Assessing Officer to allow the deduction u/s. 80IA in respect of the units at Mangalore and Salem. 3.2. Aggrieved by the order of learned CIT (Appeals), the Revenue is in appeal before us. 4. The Ld.DR for the revenue has submitted that no agreement as contemplated under section 80 IA( 4) was entered into by the assessee either with the central government or state government or local authority or any other statutory authority for the purposes of developing, operating and maintaining, developing operating and maintaining a new infrastructure facilities. It was submitted that the assessing officer had rightly denied the benefit of 80 IA to the assessee as the assessee failed to fulfil the requirement of law. 5 ITA Nos.774 & 775/Hyd/2020 5. The Ld.DR for revenue had drew our attention to the consent for the establishment granted to the assessee on receipt of the application dated 7/7/2003. It was the submission of the DR that the consent granted by the pollution control board cannot be equated with the agreement as envisaged in section 80IA (4) of the Act. To buttress his argument he had drawn our attention to the supplementary agreement entered into between the assessee with Bruhat Bangalore Mahanagara Palika, wherein a proper agreement was entered between them and the assessing officer had granted the benefit of 80 IA(4) to the assessee. 6. It was also the contention of the Ld. DR that the “agreement” mentioned in section 80IA cannot be substituted either with the approval order or the consent order. It was submitted by DR that prerequisite of agreement is ad-idem to do a particular work on certain terms and conditions, whereas for the approval/consent granted for operating and maintaining were issued by the pollution control board on fulfilment of various conditions and no meeting of mind is required . The rational for grant of approval/consent for operation is different from fulfilling the obligation as contemplated under section 80 IA(4) of the Ac. The supplementary agreement to operate a facility for collection, reception, treatment etc at Industrial Area, Karnad Mulky, Dakshina Kanada District was entered with 6 ITA Nos.774 & 775/Hyd/2020 Bruhat Banglore Mahanagar Palika, which provides as under :- 7 ITA Nos.774 & 775/Hyd/2020 8 ITA Nos.774 & 775/Hyd/2020 From the perusal of the supplementary agreement, it is clear that Bruhat Bangalore Mahanagar Palike through DC Health, had signed the agreement with assessee, after the 9 ITA Nos.774 & 775/Hyd/2020 assessee inviting and accepting the Bid, was accepted by the Palika. 7. The Ld.DR had submitted that the order passed by the CIT(A) is required to be reversed being contrary to the provision of law. 8. On the other hand, the Ld.AR for assessee had supported the order passed by the CIT(A). It was submitted that once the approvals have been granted to the assessee by the pollution control board then there was sufficient compliance by the assessee. The Ld.AR for the assessee had also submitted that the approval/consent granted by the pollution control board has attributes of agreement. It was also contended that no specific format for entering into agreement was given under section 80IA, therefore even the consent given by the pollution control board is sufficient for the purposes of granting the benefit to the assessee under section 80IA. The Ld.AR for the assessee had also submitted the following written submission in support of the assessee’s case: 10 ITA Nos.774 & 775/Hyd/2020 11 ITA Nos.774 & 775/Hyd/2020 12 ITA Nos.774 & 775/Hyd/2020 13 ITA Nos.774 & 775/Hyd/2020 14 ITA Nos.774 & 775/Hyd/2020 15 ITA Nos.774 & 775/Hyd/2020 16 ITA Nos.774 & 775/Hyd/2020 17 ITA Nos.774 & 775/Hyd/2020 18 ITA Nos.774 & 775/Hyd/2020 19 ITA Nos.774 & 775/Hyd/2020 20 ITA Nos.774 & 775/Hyd/2020 21 ITA Nos.774 & 775/Hyd/2020 9. In rebuttal to the argument of the Ld.AR, the DR for the revenue had submitted that at the time of claiming the benefit of 80IA, the assessee is duty-bound to furnish the copy of the duly signed agreement along with the claim of benefit of 80IA. The Ld.DR had also relied upon the decision of the Hon’ble Supreme Court in the case of the PCIT Vs. Wipro Limited reported in 140 taxmann.com 223 (SC) whereby it was submitted that there should be strict compliance of the provision of law whenever any exemption of income/or direction was claimed by the assessee. 22 ITA Nos.774 & 775/Hyd/2020 10. We have heard the rival contentions of the parties and perused the material on record. In the present case, the Assessing Officer has denied the benefit of 80IA(iv) of the Income Tax Act, 1961 by observing in of the assessment order for 2013-14 for the following reasons : From the perusal of reasons, it is clear that the Assessing Officer has disallowed the claim only on the basis of that the assessee has not entered into an agreement with the Karnataka State Pollution Control Board, Bangalore and also with the Tamilnadu State Pollution Control Board, Salem District. Though for both the places, the assessee was having consent / authorization to operate facility for collection / reception / treatment / storage/ transport and disposal of bio-medical waste at its premises. 11. However, the ld.CIT(A) had allowed the appeal of the assessee by giving his reasons in para 10.6 and 10.7 to the following effect : “ 10.6 The only contention of the Assessing Officer, is that the orders/approvals, issued by the prescribed authorities, cannot be said to be agreements between the appellant and the prescribed authorities. The orders issued by the prescribed authorities are in fact based on the applications/proposals, made by the appellant. What was proposed has been accepted by issuing orders. Therefore, there is a meeting of minds between the two parties involved which itself is an “agreement”. The essential requirements of what constitutes “agreement” have been met. At para 4.5 of the assessment order, the Assessing Officer himself noted that the necessary permissions for conducting the business were obtained. This leaves no doubt that the ‘agreement’, as required u/s. 80IA(4), is in place. Further, once the prescribed authority has issued order/approval, in response to the proposal / application made, there is no point in saying that the orders obtained are not signed by the appellant company. 23 ITA Nos.774 & 775/Hyd/2020 10.7 As pointed out by the appellant, it would also be relevant to note that the term ‘agreement’ is not defined in the IT Act and no specific format for ‘agreement’ is provided either in the Act or under the Rules.” 12. Now we have to decide whether the word “agreement” used in section 80IA(iv)(b) can be substituted/ replaced with the word “consent” or “authorization” AS ARGUED BY THE LD.AR . The ld.AR for the assessee during argument and in written submissions had submitted that no specific format of agreement was provided by the Act. He has drawn strength from the definition of the term “agreement” provided under Indian Contract, Act, 1972 and he had also drawn our attention to section 2(e), 2(a), 2(b), sections 8 and 9 of the Contract Act. He has submitted that the essential for constituting an agreement is plurality of persons and offer and acceptance by the parties. It was submitted that it is the case of the Assessing Officer that the permission was granted to the assessee for running the bio-medical waste facilities in the name of the assessee, hence there was sufficient compliance by the assessee. He relied upon the decisions which are referred hereinabove; in the written submissions. 13. The question which is required to be considered is whether the grant of approval / consent will partake the character of the agreement or not. As mentioned by the ld.AR that for the purpose of agreement, offer and acceptance by both the parties i.e. the promisor and 24 ITA Nos.774 & 775/Hyd/2020 promisee are essential. In case any person applies for grant of setting up of Centralized Treatment Plan (CTP) or Sewerage Treatment Plant (STP) with the Pollution Control Board, Can it be said that application, would amount to entering into agreement for the purposes of consent creating new infrastructure in terms of section 80IA(4) or development of the infrastructure ? The answer is No, as in our view, the development of the infrastructure should be preceded with the agreement to create said infrastructure. In other words, there must be some agreement in existence prior to raising of any infrastructure either with the Central Government or State Government or local authorities. Based on such agreement, the assessee should have developed or operated or maintained the infrastructure. 13.1 Further the Pollution Control Board grants the consent for operating of the facilities in accordance with Rules and Regulations. The issuance of the certificate by the Pollution Control Board on the application of the assessee cannot be construed as an agreement between the Pollution Control Board and the assessee, it is a statutory approval under the Environment Pollution Act. It is the duty of the Central Government or State Government to protect and improve the quality of the environment. The Central Government in pursuance of its power had made rules providing standards for quality of air, water and soil etc. (Rule 6), Rule 8 provides that “no person shall handle 25 ITA Nos.774 & 775/Hyd/2020 or cause to be handled any hazardous substance except in accordance with such procedure and after complying with such safeguards as may be prescribed”. The Central Government had framed the Bio-medical Waste Rules, 1998 for the purposes of laying down the guidelines, conditions and standard for treatment and disposal of medical waste. Under Rule 8(4) of the Bio-medical Waste, the assessee filed an application authorizing it to operate the facilities for collection of reception / storage / treatment etc of the Bio- medical Waste. This authorization is essential for any person who is handling any hazardous substance including the Bio-medical Waste. In the absence of such authorization which provides the fulfillment of various conditions, no person can run the facilities of the Bio- medical Waste Management. 14. The authorization under the Bio-medical Waste Rules, 1998 is an essential statutory requirement for providing the facilities of the Bio-medical Waste Management. The authorization granted by the Pollution Control Board is not akin to any agreement, rather it is statutory approval for providing the facility under E.P. Act. Therefore, it cannot be said that merely because the assessee was authorized by the Pollution Control Board, the assessee had fulfilled the conditions as provided under section 80IA of the Act as there is no ambiguity in the statute and therefore, the plain literal meaning is required to be given to the word 26 ITA Nos.774 & 775/Hyd/2020 “agreement’” used u/s 80IA(4). There was no ambiguity in understanding the meaning of “agreement” in the mind of assessee, as assessee had entered into a written agreement with Bruhat Bangalore Mahanagar Palika (supra), after acceptance of its bid , with signature of both parties. Based on this agreement/supplement requirement, the Assessing Officer had granted benefit u/s 80IA(4) of the Act to the assessee. 15. Reliance of the assessee on behalf of the decision of Hon’ble Madras High Court in the case of A.L.Logistics (P.) Ltd. is on different facts. Similarly, in another case titled as CIT Vs. Chettinad Lignite Transport Services (P.) Ltd reported in (2019) 107 taxmann.com 12 (Madras) in the said case, “impliedly the department has accepted the fact that the assessee has provided the infrastructure facilities to the specified authority”. 16. In our view, the grant of approval by the Pollution Control Board for running the facility of the bio-medical waste management would not amount to entering into agreement for providing the infrastructure facility to the specified authority. There is a distinction between the statutory approval for proving the facility and the agreement entered between authorities for providing or laying down or the infrastructure facilities. For the purposes of section 80IA, there must be some written agreement or an 27 ITA Nos.774 & 775/Hyd/2020 agreement can be inferred from the conduct of parties agreeing for laying certain infrastructure facilities to be provided by the taxpayer to the specified authority. In the present case, nothing has been brought to our notice no agreement was entered between the assessee and the specified authority for providing the infrastructure facility, therefore, A.O. had rightly dismissed the benefit u/s 80IA(4) of the Act. We may lastly refer to the decision of Hon’ble Supreme Court in the case of PCIT Vs. M/s. Wipro Limited reported in (2022) 140 taxmann.com 223 (SC) wherein it was held as under : “8. While considering the issue involved, whether the time limit within which the declaration is to be filed as provided under Section 10B (8) is mandatory or directory, Section 10B (8) is required to be referred to, which reads as under: “10B (8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under sub-section (1) of Section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of this section may not be made applicable to him, the provisions of this section shall not apply to him for any of the relevant assessment years.” On a plain reading of Section 10B (8) of the IT Act as it is, i.e., “where the assessee, before the due date for furnishing the return of income under sub-section (1) of section 139, furnishes to the Assessing Officer a declaration in writing that the provisions of Section 10B may not be made applicable to him, the provisions of Section 10B shall not apply to him for any of the relevant assessment years”, we note that the wording of the Section 10B (8) is very clear and unambiguous. For claiming the benefit under Section 10B (8), the twin conditions of furnishing the declaration to the assessing officer in writing and that the same must be furnished before the due date of filing the return of income under sub-section (1) of section 139 of the IT Act are required to be fulfilled and/or satisfied. In our view, both the conditions to be satisfied are mandatory. It cannot be said that one of 28 ITA Nos.774 & 775/Hyd/2020 the conditions would be mandatory and the other would be directory, where the words used for furnishing the declaration to the assessing officer and to be furnished before the due date of filing the original return of income under subsection (1) of section 139 are same/similar. It cannot be disputed that in a taxing statute the provisions are to be read as they are and they are to be literally construed, more particularly in a case of exemption sought by an assessee. 9. In such a situation, filing a revised return under section 139(5) of the IT Act claiming carrying forward of losses subsequently would not help the assessee. In the present case, the assessee filed its original return under section 139(1) and not under section 139(3). Therefore, the Revenue is right in submitting that the revised return filed by the assessee under section 139(5) can only substitute its original return under Section 139(1) and cannot transform it into a return under Section 139(3), in order to avail the benefit of carrying forward or set- off of any loss under Section 80 of the IT Act. The assessee can file a revised return in a case where there is an omission or a wrong statement. But a revised return of income, under Section 139(5) cannot be filed, to withdraw the claim and subsequently claiming the carried forward or setoff of any loss. Filing a revised return under Section 139(5) of the IT Act and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible. By filing the revised return of income, the assessee cannot be permitted to substitute the original return of income filed under section 139(1) of the IT Act. Therefore, claiming benefit under section 10B (8) and furnishing the declaration as required under section 10B (8) in the revised return of income which was much after the due date of filing the original return of income under section 139(1) of the IT Act, cannot mean that the assessee has complied with the condition of furnishing the declaration before the due date of filing the original return of income under section 139(1) of the Act. As observed hereinabove, for claiming the benefit under section 10B (8), both the conditions of furnishing the declaration and to file the same before the due date of filing the original return of income are mandatory in nature. 10. Even the submission on behalf of the assessee that it was not necessary to exercise the option under section 10B (8) of the IT Act and even without filing the revised return of income, the assessee could have submitted the declaration in writing to the assessing officer during the assessment proceedings has no substance and the same cannot be accepted. Even the submission made on behalf of the assessee that filing of the declaration subsequently and may be during the assessment proceedings would have made no difference also has no substance. The significance of filing a declaration under section 10B (8) 29 ITA Nos.774 & 775/Hyd/2020 can be said to be co-terminus with filing of a return under section 139(1), as a check has been put in place by virtue of section 10B (5) to verify the correctness of claim of deduction at the time of filing the return. If an assessee claims an exemption under the Act by virtue of Section 10B, then the correctness of claim has already been verified under section 10B (5). Therefore, if the claim is withdrawn post the date of filing of return, the accountant’s report under section 10B (5) would become falsified and would stand to be nullified. 11. Now so far as the reliance placed upon the decision of this Court in the case of G.M. Knitting Industries Pvt. Ltd. (supra), relied upon by the learned counsel appearing on behalf of the assessee is concerned, Section 10B (8) is an exemption provision which cannot be compared with claiming an additional depreciation under section 32(1) (ii-a) of the Act. As per the settled position of law, an assessee claiming exemption has to strictly and literally comply with the exemption provisions. Therefore, the said decision shall not be applicable to the facts of the case on hand, while considering the exemption provisions. Even otherwise, Chapter III and Chapter VIA of the Act operate in different realms and principles of Chapter III, which deals with “incomes which do not form a part of total income”, cannot be equated with mechanism provided for deductions in Chapter VIA, which deals with “deductions to be made in computing total income”. Therefore, none of the decisions which are relied upon on behalf of the assessee on interpretation of Chapter VIA shall be applicable while considering the claim under Section 10B (8) of the IT Act. 12. Even the submission on behalf of the assessee that the assessee had a substantive statutory right under Section 10B (8) to opt out of Section 10B which cannot be nullified by construing the purely procedural time requirement regarding the filing of the declaration under Section 10B (8) as being mandatory also has no substance. As observed hereinabove, the exemption provisions are to be strictly and literally complied with and the same cannot be construed as procedural requirement. 13. So far as the submission on behalf of the assessee that against the decision of the Delhi High Court in the case of Moser Baer (supra), a special leave petition has been dismissed as withdrawn and the revenue cannot be permitted to take a contrary view is concerned, it is to be noted that the special leave petition against the decision of the in the case of Moser Baer (supra) has been dismissed as withdrawn due to there being low tax effect and the question of law has specifically been kept open. Therefore, withdrawal of the special leave petition against 30 ITA Nos.774 & 775/Hyd/2020 the decision of the Delhi High Court in the case of Moser Baer (supra) cannot be held against the revenue. 14. In view of the above discussion and for the reasons stated above, we are of the opinion that the High Court has committed a grave error in observing and holding that the requirement of furnishing a declaration under Section 10B (8) of the IT Act is mandatory, but the time limit within which the declaration is to be filed is not mandatory but is directory. The same is erroneous and contrary to the unambiguous language contained in Section 10B (8) of the IT Act. We hold that for claiming the benefit under Section 10B (8) of the IT Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with. Accordingly, the question of law is answered in favour of the Revenue and against the assessee. The orders passed by the High Court as well as ITAT taking a contrary view are hereby set aside and it is held that the assessee shall not be entitled to the benefit under Section 10B (8) of the IT Act on noncompliance of the twin conditions as provided under Section 10B (8) of the IT Act, as observed hereinabove. The present Appeal is accordingly Allowed. However, in the facts and circumstances of the case, there shall be no order as to costs. 17. We respectfully following the decision in the case of Wipro Limited (supra), hold that for the purpose of claiming 80IA(4) benefit, entering into an agreement with the specified authority is essential. So far as the finding recorded by the Hon’ble Supreme Court in the case of G.M. Knitting Industries Ltd is concerned, the Hon’ble Supreme Court has only permitted the filing of Form 3AA at the time of assessment proceedings but prior to passing of the final order as sufficient compliance. In the present case, no agreement has been entered into by the assessee till date. Therefore, it cannot be said that the assessee has fulfilled the condition as required under the law. Further, in Para 2 31 ITA Nos.774 & 775/Hyd/2020 of the decision of the Hon’ble Supreme Court in the case of G.M. Knitting Industries Ltd., it was held as under : “2. We concur with the aforesaid view of the High Court and hold that even if Form 3AA was not filed along with return of income but the same was filed during the assessment proceedings and before the final order of the assessment was made that would amount to sufficient compliance. These appeals are, accordingly, dismissed.” 18. In the present case, the assessee has not filed any agreement as contemplated u/s. 80IA(4)(b) of the Act, therefore, it cannot be said that there is sufficient compliance on the part of the assessee which entitled the assessee to avail the deduction under this Chapter VI of the Act. In view of the above, the grounds no 1 to 4 raised by the Revenue are allowed. 19. Ground No.5 pertains to ESI/EPF. In this regard, it is noted that the ld. CIT(A) had decided the issue in paras 9.1 and 9.2 of the order by relying upon the decision of the jurisdictional ITAT in the case of Nuziveedu Swati Coastal Constortium. 20. Ld.DR heavily relied on the order of the NFAC. He submitted that the Finance Act, 2021 has amended the provision of section 43B, as well as section 36(1)(va) by insertion of explanation to those sections. He drew the attention of the bench to the explanatory notes to the Finance Bill, 2021 and submitted that the legislature never 32 ITA Nos.774 & 775/Hyd/2020 intended that section 43B would apply to employees’ contribution. He submitted that the language of explanation 5 to section 43B, explanation 2 to section 36(1)(va) and that of the Memorandum explaining the Finance Act, 2021 make it abundantly clear that employees’ contribution is out of the ambit of section 43B. Relying on various decisions, he submitted that the NFAC was fully justified in upholding the addition made by the AO on account of delayed payment of PF and ESIC amounting to Rs. 31,632/-. 21. On the other hand, the ld.AR relied on the decision of the ld.CIT(A). 22. We have heard the rival arguments made by both the sides, perused the orders of the AO and ld.CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the AO in the instant case made addition of Rs. 31,632/- on account of delayed deposit of employees’ contribution to PF and ESIC on the ground that the same were deposited beyond the due date prescribed in the said Act. We find the ld.CIT(A) had rightly allowed the contention of the assessee that such payments though made after the stipulated dates prescribed in the said Acts, however these payments were made before the due date of filing of the return. We find the co-ordinate benches of the Tribunal are 33 ITA Nos.774 & 775/Hyd/2020 now consistently taking the view that no disallowances u/s. 36(1)(va) r.w.s. 2(24)(x) can be made on account of delayed payment of PF and ESIC, if such payments are made before the due date of filing of the return. It has further been held in these decisions that the amendment to section 43B as well as section 36(1)(va) r.w.s. 2(24)(x) by the Finance Act, 2021 are prospective and not retrospective in nature. Since, the assessee in instant case has admittedly paid the employees’ contribution to PF and ESIC before the due date of filing of the return, therefore, we uphold the order of the ld.CIT(A). The grounds raised by the Revenue is dismissed. 23. Since we have decided the grounds in ITA No.774/Hyd/2020, same decision shall apply ITA No.775/Hyd/2020 mutatis mutandis. 24. In the result, both the appeals filed by the Revenue are partly allowed. Order pronounced in the open court on 30 th August, 2022. Sd/- Sd/- (RAMA KANTA PANDA) (LALIET KUMAR) Accountant Member Judicial Member Hyderabad, Dt. 30.08.2022. * Reddy gp 34 ITA Nos.774 & 775/Hyd/2020 Copy to : 1. M/s. Ramky Energy and Environment Limited, Room No.714, 7 th Floor, Signature Towers, Kondapur, Hyderabad-500 084 2. DCIT, Circle 3(1), Hyderabad. 3. Pr. C I T-3, Hyderabad. 4. CIT(Appeals)-9, Hyderabad. 5. DR, ITAT, Hyderabad. 6. Guard File. By Order Sr. Pvt. Secretary, ITAT, Hyderabad.