Gopalakrishna Aswini Kumar Vs Assistant Director of Income Tax (ITAT Banglore)
Hon’ble Karnataka High Court in the case of Essae Teraoka Pvt. Ltd., (supra) has taken the view that employee’s contribution under section 36(1)(va) of the Act would also be covered under section 43B of the Act and therefore if the share of the employee’s share of contribution is made on or before due date for furnishing the return of income under section 139(1) of the Act, then the assessee would be entitled to claim deduction. Therefore, the issue is covered by the decision of the Hon’ble Karnataka High Court. The next aspect to be considered is whether the amendment to the provisions to section 43B and 36(1)(va) of the Act by the Finance Act, 2021, has to be construed as retrospective and applicable for the period prior to 01.04.2021 also. On this aspect, we find that the explanatory memorandum to the Finance Act, 2021 proposing amendment in section 36(1)(va) as well as section 43B is applicable only from 01.04.2021. These provisions impose a liability on an assessee and therefore cannot be construed as applicable with retrospective effect unless the legislature specifically says so. In the decisions referred to by us in the earlier paragraph of this order on identical issue the tribunal has taken a view that the aforesaid amendment is applicable only prospectively i.e., from 1.4.2021. We are therefore of the view that the impugned additions made under section 36(1)(va) of the Act in both the Assessment Years deserves to be deleted.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal by the assessee against the order dated 19.07.202 1 of CIT(A) National Faceless Appeal Centre (NFAC), Delhi, relating to Assessment Year 2019-20.
2. The assessee is an individual. He carries on the business of manufacturing of spares. Assessee filed return of income for Assessment Year 2019-20 on 01.11.2019 declaring total income of Rs.3,19,47,138/-. The return filed by the assessee was processed under section 143(1) of the Income Tax Act 1961 (hereinafter called the ‘Act’), by the Central Processing Centre (CPC). By an intimation dated 01.05.2020, the total income of the assessee was assessed at Rs.3,37,39,551/-. The difference in the income declared in the return of income and as computed in the intimation under section 143(1) of the Act was due to addition of Rs.17,92,413/-. The aforesaid sum was ESI and PF contribution of employees’ share which the assessee deposited with the authorities under the PF and ESI within the due date for filing return of income under section 139(1) of the Act and those payments were beyond the due date as prescribed in the relevant law relating to contribution to PF and ESI. The actual date of payment of PF and ESI by the assessee on the date of payment were as follows:
