Employees’ Contribution towards ESI & PF before filing of return u/s 139(1)- Amendment made by Finance Act 2021 is not applicable retrospectively
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Case Details: |
AKS Power Equipments Pvt. Ltd. vs. DCIT (CPC) Bangalore |
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Appeal No.: |
I.T.A. No. 244/Kol/2021 |
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Order pronounced by: |
ITAT Kolkata |
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Date of Order: |
01-09-2021 |
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In favour of: |
Assessee |
Source: www.itat.gov.in
Brief Facts:
The matter was decided by the ITAT Tribunal in the case of appeals filed by different assessee’s including the abovementioned appellant against orders passed by Ld. CIT (A)- NFAC, Delhi. All these appeals have common issues relating to addition on account of delay in payment of employees’ contribution towards PF & ESI even though the assessee has remitted the employees’ contribution towards PF & ESI well before the filing of return u/s 139(1) of the Income Tax Act.
Submission by Ld. AR:
- The Ld. AR on behalf of the appellant submitted that the amendment made by the Finance Act, 2021 is not applicable in these cases. The Ld. CIT (A) erred in applying the explanation brought in by Finance Act, 2021 since this Tribunal has already held that the amendment/ explanation brought in by Finance Act, 2021 is prospective in nature and not applicable to these assessment years before us and cited the decision of this Tribunal in ITA No. 186/Kol/2021 Harendra Nath Biswas Vs. DCIT AY 2019-20.
- Further, the assessee is also relying on the decision of the Hon’ble Jurisdictional High Court in the case of CIT vs. M/s Vijayshree Limited reported in [2014] 43 taxman.com 396 (cal).
Ruling by Tribunal:
- It is an admitted fact which has not been disputed by either the A.O. or the Ld. CIT (A) that the assessee has remitted the employees’ contribution towards PF & ESI before filing of return u/s 139(1) of the Act.
- This tribunal has already taken a view that the amendment brought in by Finance Act, 2021 on this issue has been held to be prospective in nature in the case of Shri Harendra Nath Biswas (supra).
- Therefore, we reiterate the same view that the amendment/ explanation brought in by Finance Act, 2021 with effect from 01-04-2021 on this issue is prospective; and the explanation brought in by Finance Act, 2021, cannot be used/ applied to unsettle the settled position of law passed by the Hon’ble jurisdictional High Court in the case of Vijayshree Limited (supra), since there is no retrospective legislative over-ruling.
- In the light of the above, we allow the appeals of the assessee and direct the A.O. to delete the addition made in this regard in all the above appeals.
Read Complete Order: AKS Power Equipments Private Limited vs. DCIT
Disclaimer: The above article is based upon the ruling of ITAT Kolkata and is merely for informative purposes. Readers are requested to act diligently and under consultation with a professional before applying the information contained in this article.
