Mavinahalli Shivananjappa Vijay Kumar Vs DCIT, CPC (ITAT Bangalore)
Disallowance of Employees contribution of PF & ESI u/s 36(1)(va) remitting the dues beyond the due date prescribed under the respective Statutes
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 notice that an identical issue has been examined by the co-ordinate bench in the case of Shri Gopalakrishna Aswini Kumar [2021 ITAT BANGALORE] wherein the co-ordinate bench has expressed the view that the amendment made to sec.36(1)(va) of the Act will have prospective application and hence the decision rendered in the case of M/s Essae Teraoka (P.) Ltd [2014 KARNATAKA HIGH COURT].
Thus we hold that the additions made in both the years are liable to be deleted. Accordingly, we set aside the orders passed by Ld CIT(A) in both the years under consideration and direct the AO to delete the impugned additions in both the years – Decided in favour of assessee.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
The assessee has filed these two appeals challenging the orders passed by Ld CIT(A), National Faceless Appeals Centre and they relate to the assessment years 2017-18 and 2019-20. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the disallowance of Employees contribution of PF & ESI u/s 36(1)(va) of the Act for remitting the dues beyond the due date prescribed under the respective Statutes.
2. The assessee is carrying on business under the name and Style “C.K. Enterprises”. In both the years under consideration, the assessee had remitted employees PF & ESI belatedly, i.e., beyond the due date prescribed in the respective statutes. However, these payments were made before the due date for filing return of income prescribed u/s 139(1) of the Act and hence the assessee claimed these payments as deduction. The details of payments so remitted belatedly are tabulated below:-
