Aroon Facilitation Management Services (P) Ltd. v. Dy. CIT

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The Tax Publishers2022 TaxPub(DT) 0283 (Del-Trib)

INCOME TAX ACT, 1961

Section 36(1)(va), Expln. 2 & Section 43B

Where the assessee had made payment of Employees' contribution to PF and ESI before due date of filing of return under section 139(1), no disallowance was warranted under section 36(1)(va).

Business deduction under section 36(1)(va) - Delayed payment of Employees' contributions to PF and ESI - Amount paid after due date but before due date of filing of return of income -

Assessee filed its return of income which was processed under section 143(1) but thereafter in the rectification order under section 154 passed by AO amount of employees' contributions to PF and ESI was disallowed on the ground that the same was not paid before the due date as prescribed in the corresponding statute. The CIT(A) also confirmed this disallowance. Hence, this appeal to the Tribunal.Held: Explanation 2 to section 36(1)(va) which was inserted vide the Finance Act, 2021, w.e.f. 1-4-2021 itself clarifies that the provisions of section 43B shall not apply and shall be deemed never to have been applied for the purposes of determining the due date under this clause. Meaning thereby that the legislature itself has condoned the impugned default before 1-4-2021. Tribunal directed AO to delete the addition.

Followed:CIT v. AIMIL Limited, Nirmala Swami, Spreadhead Digital Studio, Net 4 India Ltd., Modipon Ltd., & Ekta Agro Industries Ltd., (2010) 321 ITR 508 (Del-HC) : 2010 TaxPub(DT) 1231 (Del-HC) and CIT Delhi v. Bharat Hotels Ltd. (2019) 410 ITR 417 (Del-HC) : 2018 TaxPub(DT) 5987 (Del-HC).

REFERRED : Dy. CIT, Circle-20 (1), New Delhi v. Planman HR (P) Ltd., 48, Community Centre, Naraina Industrial Area, Phase-I, ITA No. 5152/Del./2017, dt. 15.7.2021 : 2021 TaxPub(DT) 3758 (Del-Trib), Crescent Roadways Private Limited vs. Dy. CIT ITA No. 1952/Hyd/2018, dt. 1-7-2021 Mahadev Cold Storage, Vinod Thanwerdas Sainani v. Jurisdictional Assessing Officer, ITA Nos. 20 & 21/Agra/2021 dt. 14-6-2021 : TaxPub(DT) 3188 (Agra-Trib), Dy. CIT, Corporate Circle 3 (1), Chennai 34 v. Talentpro India HR (P) Ltd. : 2021 TaxPub(DT) 2129 (Chen-Trib), Dy. CIT Circle-7 (1), New Delhi vs Dee Development Enginneers Ltd., ITA No. 4959/ Del./2016, Dt. 8.4.2021 : 2021 TaxPub(DT) 2025 (Del-Trib), Dy. CIT, Corporate Circle 5 (1), Chennai v. Repco Home Finance (P) Ltd. (2020) 183 ITD 782 ITAT-Chennai : 2020 TaxPub(DT) 2537 (Chen-Trib) and CIT, West Bengal I vs. Vegetable Products Limited (1973) 82 ITR 192 (SC) : 1973 TaxPub(DT) 421 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2018-2019

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