The Delhi Bench Income Tax Appellate Tribunal ( ITAT ), has held that no disallowance of provident fund and Employees State Insurance contributions on account of delay in deposit.
Total 45 appeals filed by different assessee’s against confirming the additions on account of delay in deposit of employee’s contribution towards provident fund and ESI fund by lower authorities.
Relying the decisions in Azamgarh Steel & Power vs. CPC and CIT vs. AIMIL Ltd. the counsel for the appellant submitted that though there is delay in deposit of PF and ESIC contributions but all the contributions received by the assessee from its employees, have deposited with the appropriate authorities before the filing of return of income by the assessee, thus, no disallowance is called for.
The counsel for the respondent contended that the amendment brought out by Finance Act 2021 would be applicable to the case, as, by the amendment, it has been clarified that provisions of Section 43B of the Act shall not apply and shall be deemed never to have been applied to a sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of Clause (24) of Section 2 applies.
The Coram of Sri Kul Bharat, Judicial Member and Sri Pradip Kumar Kedia, Accountant Member has observed that the Finance Bill 2021 clearly states that the amendment will take effect from 01st April 2021 and will prospectively apply in relation to the assessment year 2021-22 and subsequent assessment year. In such a situation, we are of the view that the amendment brought out by Finance Act, 2021 does not apply to the assessment year under consideration.
The Tribunal while allowing the appeals, relying the decision of Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. has held that “the issue is no more res-integra. The issue has already been settled in favour of the assessee by various judicial pronouncements by the Tribunal”.
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