| The Tax Publishers2021 TaxPub(DT) 6005 (Bang-Trib) INCOME TAX ACT, 1961
Section 36(1)(via)
Amendment brought by Finance Act, 2021 to section 36(1)(via) and 43B is only prospective in nature and not retrospective and the same to be effective from 1-4-2021 and will apply for and from the assessment year 2021-22 onwards. Thus, the said amendment would not be applicable to relevant year under consideration. As assessee remitted employees' contribution to PF and ESI before due date of filing of return under section 139(1); the assessee would be entitled to deduction under section 36(1)(via).
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Business deduction under section 36(1)(via) - Employees' contribution to PF and ESI - Payment before due date of filing return - Amendment brought by Finance Act, 2021 to section 36(1)(via) and 43B, whether prospective or retrospective in effect
Assessee-company was engaged in business of manufacture of gearboxes, etc. AO made disallowance on the ground that employees' contribution to PF and ESI was remitted to concerned funds beyond the stipulate due date. On appeal, the assessee submitted that it remitted the employees' contribution to PF and ESI before due date of filing of return under section 139(1), hence, was entitled to deduction under section 36(1)(via). However, CIT(A) placing reliance on amendment brought by Finance Act, 2021 to section 36(1)(via) and 43B, held that insofar as employees' contribution to fund, is concerned, the employer who deducts the same from salary had to necessarily make the remittance within the due date specified in respective Acts, failing which the assessee/employer losses the benefit of deduction. Accordingly, the CIT(A) upheld the said disallowance.Held: It is very well settled that amendment brought by Finance Act, 2021 to section 36(1)(via) and 43B is only prospective in nature, and not retrospective and the same to be effective from 1-4-2021 and will apply for and from assessment year 2021-22 onwards. Thus, the said amendment would not be applicable to relevant year under consideration. Since assessee remitted employees' contribution to PF and ESI before due date of filing of return under section 139(1); the assessee was entitled to deduction under section 36(1)(via).
Held:Jana Urban Services for Transformation (P) Ltd. v. Dy. CIT [ITA No. 307/BANG/2021 (Order, dated 11-10-2021)], Dhabriya Polywood Limited v. ADIT (2021) 63 CCH 30 (JP-Trib : 2021 TaxPub(DT) 5099 (Jp-Trib), Indian Geotechnical Services v. Asstt. CIT [ITA No. 622/DEL/2018 [Order, dated 27-8-2021)] : 2021 TaxPub(DT) 4772 (Del-Trib) and Maytas-NCC (JV) v. Asstt. CIT [ITA No. 1292/Hyd/2010, dt. 27-8-2012].
REFERRED : M.M. Aqua Technologies Ltd. v. CIT (2021) 436 ITR 582 (SC) : 2021 TaxPub(DT) 4409 (SC), Essae Teraoka (P) Ltd. v. Dy. CIT (2014) 366 ITR 408 (Karn-HC) : 2014 TaxPub(DT) 1218 (Karn-HC)
FAVOUR : In assessee's favur.
A.Y. : 2017-18
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