Income Tax Appellate Tribunal – Agra
M/S Luthra Industrial … vs Jurisdictional Assessing … on 23 November, 2021 IN THE INCOME TAX APPELLATE TRIBUNAL
AGRA BENCH: AGRA
BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER
AND
DR. MITHA LAL MEENA, ACCOUNTANT MEMBER
LT.A No. 48/AGR/2021
(ASSESSMENT YEAR: 2019-20)
M/s. Luthra Industrial Corporation Vs. | Juridictional Assessinng
Officer Circle -1(1)(1),
B-1, Site-B, Industrial Area
Agra U.P.
Sikandra, Agra U.P. 282007
PAN: AABFL2405P
(Assessee) (Revenue)
Assessee by |Sh. Navin Gargh, Adv.
Revenue by Waseem Arshad, Sr. DR
Date of Hearing 14.10.2021
23.11.2021
Date of Pronouncement
ORDER
PerBench
Present appeal was filed by the assessee feeling aggrieved By the order passed by
the CIT(A) on 23 June 2021 on the following grounds:-
Because Maven case of in any view, in the Intimation u/s 143(1) dt.10.04.2020, the impugned
1
Disallowance of Rs. 1,85,482/- confirmed by the Ld. CIT(A) (NFAC) (of
Employees Contribution to
Financial Year itself before due date of filing of Return) is
Provident Fund/ E.S.I deposited during the
and bad in law
grosslyarbitrary, highly unjust, unwarranted, perverse, wrong, illegal
LT.A No, 48/AGR/2021
been confirmed by
2the Ld. Because any view, the above impugned Disallowance of Rs. 1,85,482/-has
in
CTT(A) (NFAC) in summary and prejudice manner, without even considering and refuting the
cited in favour of the
Judgments including that of Jurisdictional Hon’ble “Allahabad High Court”
Appellant.The impugned Order of Ld. CIT(A), NFAC is perverse.
stands
3- Disallowance of Rs. 1,85,482/-
Because inany view, the issue of impugned
recent consolidated Order
squarely covered in favour of the Appellant by the very Order Passed
dt.14.06.2021 of the Jurisdictional Hon’ble 1TAT Agra Bench, Agra ITAT
the
Hon’ble Allahabad High Court in
Respectfully following the decision of Jurisdictional ITA No.41&
matter of M/s Sagun Foundry (P) Ltd. vs CIT (2017)
78 Taxmann 47 vide
2019-20 M/s Mahadev Cold Storage. vs. Assessing
42/Agr/2021 of A.Y.2018-19 and A.Y. of A.Y.2018-19 & 2019-20
Officer, Circle-4(1)(2), Aligarh and ITA No.208& 21/Agr/2021
Vinod Thanwerdas vs. Assessing Officer Ward-1(1)(5), Agra.
had submitted that the
1) At the outset the Ld.AR for the assessee
concluded that the amended provision was
CIT(A) had wrongly
and therefore had wrongly denied the benefit of
retrospective in nature
It was submitted that the amendment to
section 43B to the assessee.
new liability and therefore it was not
the provision was creating a
prospective nature he relied upon the
retrospective rather it was
in the matter of M/sMahadev cold
decision of the coordinate bench
decision ion the matter of
storage ITA no 21/agra/2021, Delhi Bench
, ITA no 622/Del/2018, Kolkata Bench
Indian Geotechnical Services
Harendra Nath Biswas ITA no 186/KOL
decision in the matter of
2021. L.T.A No. 48/AGR/2021
passed by the CIT(A) and
2) Per contra the Ld.DR relied upon the order
our attention was drawn to the following paragraphs
it is seen
considered the submission made by the appellant
4.11 have
by CPC. As the Employee’s
that the of income is processed the
were paid by
return
ES1 amounting to Rs. 1,85,482/- Contribution of PF and section
date” as per the
explanation below
“due
appellant after the back to the total
1 T Act,1961, the same was added
36((1)(va) of the
r.w.s.
of provision of Section 2(24)(x)
income of the appellant
in the light the auditor in
the information given by
36(1)(va) of the Act relying
upon the following
the provisions of section 143(1 )(a)(iv)
Form 3CD. As per
made: adjustment can be
or in
under section 139,
Where a return has been made returnshall be
“143. (1) such
notice under
sub-section (1) of section 142,
response to
a
namely:
–
manner,
processed in the following
after making the following
loss shall be computed
the total income
or
(a)
adjustments, namely:(i)
(ii). * * * * * * * * *
(iii)… but not taken into
indicated in the Audit Report
disallowance of expenditure
(iv) total income in the return;
account in computing the
as Appellant’s
to make such adjustment
shovws that CPC is within the power such payments have
been
This
in the tax audit report that
indicated I T Act,1961,
auditor himself has in the section 36(1)(va) of the
the due date prescribed the Audit Report.
made beyond Income against
claimed it in the Return of
but Appellant has
LT.A No. 48/AGR/2021
4.2 The submission of the appellant in respect of disallowance of employee’s
contribution is duly considered. However, the same cannot be accepted in view of
the amendments made to section 36 and 43B by the Finance Act, 2021. The
Finance Act, 2021 has amended section 36, which reads as under-
clause (va), the
section 36 of the Income-tax Act, in sub-section (1), in
In after Explanationl as
Explanation shall be numbered as Explanation 1 thereof and
So numbered, the following Explanation shall be inserted, namely:
that the
it is hereby clarified
Explanation 2.-For the removal of doubts, to have
and shall be deemed never
provisions of section 438 shall not apply this
of determining the “due date” under
been applied for the purposes
clause;’.”
amended section 43, as under-
The finance Act, 2021 has also
Income-tax Act, after Explanation
4, the following
“In section 438 of the
Explanation shall be inserted, namely: that the
it is hereby clarified
5.-For the removal of doubts, have
“Explanation
not apply and shall
be deemed n e v e r to
this section shall
provisions of of his employees to
sum received by
the a s s e s s e e from any
been applied to a
sub-clause (x) of clause (24)
of section 2 applies.”
which the provisions of
amended section 36 of
the Income-tax
4.3 Thus, the Finance Act,
2021, has
Sub-section () of the said section provides
Act, relating to other deductions. thereof for computing
for in the clauses
for allowing of deductions provided of the said
section 28 of the said Act. ‘Clause (va)
the income referred to
in the
allowance of deduction
for any sum received by
sub-section provides for of sub-clause (x)
of his employees to which the provisions
a s s e s s e e from any the a s s e s s e e to the
section 2 apply, if such sum is credited by
of clause (24) of on or before the
due date.
account in the
relevant fund or funds
employee’s of this clause,
clause provides that for the purposes
the said as an employer to
Explanation to the a s s e s s e e is required
date by which
“due date” m e a n s the account in the
relevant
contribution to the employee’s
credit an employee’s under any
issued thereunder or
order or notification
fund under any Act, rule, or otherwise. By
virtue of newly
contract of service
standing order, award,
sub-section (1) of the
said section, the
clause (va) of
inserted Explanation 2
to to have
and shall be deemed n e v e r
of section 43B shall not apply
provisions
I.TANo.48/AGR/2021
been applied for the purposes of determining the “due date” under the said
clause
4.4 Section 43B of the Income-tax Act relates to allowing certain deductions
that any sum
only on actual payments. Clause (b) of the said section provides
payable by the assessee as an employer by way of contribution to any
for fund
provident fund superannuation fund or gratuity fund
or
or any other
in
the welfare of employees shall be allowed (irrespective
of the previous year
by
incurred the assessee according to
Which the liability to pay such sum was the
the method of accounting regularlyemployed by him) only in computing is
of that previous year, in which such sum
income referred to in section 28
that nothing
by him. Proviso to the said section provides
actually paid relation to any sum
which is actually
Contained in this section shall apply in
in his case for
on or before the due date applicable
paid by the assessee
sub-section (1) of section
139 in respect
furnishing the returnof income under as
such sum was incurred
in which the liability to pay
of the previous year furnished by the a s s e s s e e along
and the evidence of such payment is the
aforesaid
insertion of Explanation
5 to this section,
virtue of have
with such return. By be deemed never to
section shall not apply and shall
provisions of this a s s e s s e e from any
of his employees to
received by the
been applied to a sum of section 2 applies.4.5
of subclause (x) of clause (24)
which the provisions Court judgement in
the case of
is also made to the Supreme
Reference Health Food Pvt. Ltd.
Ahmedabad vs. Gold Coin
Commissioner of Income Tax-I, Hon’ble Supreme
with a similar issue.
9 SSC 622 wherein while dealing
(2018)
decision has quoted the following
Court in Para 15 ofthe
interpretation, 11’h Edn.
2008, Justice G.P. Singh
“In Principles of Statutory follows:-
regarding retrospective operation of statutes as
has statedthe position
to declaratory
operation is not applicable
The presumption against retrospective Court. For modern
As stated in Craies and approved by the Supreme
statutes. remove doubts existing
be defined as an Act to
purposes a declaratory Act may
LT.A No. 48/AGR/2021
as
to the common law or the meaning or effect of any statute. Such Acts are
usually held to be retrospectives. The usual reason for passing a declaratory ACt
is to set aside what Parliament deems to have been judicial error, whether in n
statement of the common law or in the interpretation of statutes. sua l
invariably, such an Act contains a preamble. and also the word ‘declared’ as we
as the word ‘enacted’. But the use of the words’it is declared’ is not conclusive
that the Act is declaratory for these words may, at times, be used to introduc
be amending the law
new rules of law and the Act in the latter case will only or
In determining, therefore, the nature
and will not necessarily be retrospective. a new Act
to the form. If
the Act, regard be had to
must be substance rather than unless construed
earlier act, it would be without object
1s to explain’ an an obvious
Act is generally passed to supply
retrospective. An explanatory Act. It is well
of the previous
omission or to clear up
doubts as to the meaning law
declaratory of the previous
curative or merely
settled that if a statute is ‘shall be deemed
intended. The language is
prospective operation
is generally have included”
deemed n e v e r to
‘shall be
meant’ or of clear words
always to have terms retrospective. In the absence
construed
declaratory, and is
in plain would not be so
Act is declaratory, it
amending amending Act may
indicating that the unambiguous. An
was clear and Act
when theamended provision a provision
of the principal
of
to clear a meaning nature will have
be purely clarificatory amendment of this
A clarificatory law when
which already implicit.
was
the principal Act was existing
therefore, if be part of the
retrospective effect and, the amending Act also will
c a m e into force, applicable
the constitution retrospective operation is not
law.The presumption
against nature of the Act, regard
existing therefore, the
to declatory statutes In determining, Act is “to explain”
If a new
than to the form.
rather
be had to the
substance retrospectively. An
must a unless construed
would be without object or to clear up
an earlier act, it obvious omission
supply an
to
explanatory Act
is generallypassed that if a statute is
Act. It is well settled
of the previous is
doubts as to the meaning lawretrospective operation
of the previous
declaratory to clear a
curative or merely be purely declaratory
Act may
An amending implicit. A
generally intended the principal Act which was already
of
meaning of a provision nature will have
retrospective effect (ibid., pp.
amendment of this an obvious
clarificatory for the purpose of supplying
statute is passed the subsequent
46B-69).Where a a former statute,
former statute or to ‘explain’ The rule
omission in a was passed.
to the time when the prior Act
statute has relation back
I.T.ANo. 48/AGR/2021
against retrospectively
is inapplicable to such legislations as these
are
explanatory and declaratory in nature.”- Zile Singh vs. State of Haryana, (2004)
8 SCC 1.”4.6 From the
wordings above, it is also clear that the
above
clarificatory amendment brought in by the Finance Act, 2021 appies
The in the instant appeal also. The amendment declares
1ssue
tnat
provisions of section 43B does not apply and deemed to have never been
applied for the purpose of determining the due date. Therefore, in view or
the above discussions, the sum of Rs 1,85,482/- being the employees
Contribution to the PF and ESI, not deposited by the appellant within the
cannot be allowed
due date as per section 36((1)(va) of the I T Act, 1961,
and this ground is dismissed.” My of May
accordingly,
is
the Ld.DR that the order passed by the CIT(A)
3) it was submitted by
required to be upheld. the
considered the rival contention of the parties and perused
4) We have
cited at bar during the
material available on record, including the judgments
At the outset it may be relevant to
course of hearing by both the parties.
we had the
the of Mahadev Cold storage
mention here that recently in
matter
section 43B of the act
occasion to deal with the
issue of disallowance under
the subject we had held that the
and after elaborate examining the law on
is not permissible if the
assessee
disallowance under section
43B of the act
the of
contribution before the due date of filing of return
had made the
I.T.ANo.48/AGR/2021
income. The same principle, continues to hold good for the assessment year
in tne ace
under consideration as in our opinion the amendment was inserted
Bill 2021,
much after the assessment year under consideration the Finance
the time
amount within
had provided the consequence of not depositing the
disallowance of the
is the
provided by the act and the consequence
the
section 43B of
as contemplated under
Contribution made by the assessee
Act. of
decision
the recent
of the bench is duly supported by
5) The above said view
of the revenue
entire gamut of
the argument
tribunal wherein the
the Kolkata
have been
thereafter the same
considered by the bench and
have been
the
the recent judgement of
hereinbelow
reproducing
rejected. We
are
231 &
Ltd. I.T.A. Nos. of Lumino Industries
matter
Kolkata tribunal in the
is as under:-
365/Kol/2021, this regard which
in an
2021 has brought
We note that
the Finance Bill,
both the parties. in PF and ESI
if not
17. Have heard contribution made
disallows the employees’ ESI Act). So
a m e n d m e n t which statutes (PF and
by the respective
due date as prescribed Shah takes effect
from
made within the to Shri Miraj D
inserted according
a m e n d m e n t has
been remittance of
after the a s s e s s m e n t year
and if the
and subsequent
by the PF/ESI Act
AY 2021-22
1st April, 2021 i.e the time prescribed
Contribution is not made within
operation.
PF/ESI Employees’ is prospective in
deduction which
allowed as a
remittance cannot be nature so,
then the amendment brought
in is clarificatory in
to Ld. CIT(A), the amendment
Whereas according the
this issue whether
So we have to adjudicate
retrospective in operation.
LT.A No. 48/AGR/2021 9
brought in by Finance Act, 2021 is prospective or retrospective in operation. We note
that before this amendment has been inserted by Finance Bill, 2021, the Hon’ble
Jurisdictional Calcutta High Court in the case of Shri Vijayshree Ltd. Ltd.(supra), M/s
Philips Carbon Black Ltd.(supra), M/s Coal India Ltd. (supra), M/s Akzo Nobel India Ltd.
hat the payment of employees’ contribution if made by an
assessee
(supra) has held
before the due date of filing of return of income u/s 139(1) of the Act, is allowable as a
as well
deduction. We note that Finance Act, 2021, the provision of Section 36(1)(va)
by
the Explanation 2 whereby
as Section 438 has been amended to this extend by inserting
and shall be deemed never
it is clarified that the provision of Section 43B shall not apply
For
date under this clause.
to have been appliedfor the purpose of determining the due
under: “Section
to Section 36(1)(va) as
ready reference, we reproduce the Explanation-2 that the
is hereby clarified
Explanation-2 For the removal of doubts, it
36(1)(va) deemed never to have
been
not apply and shall be
provisions of Section 43B shall find that
We
under this clause’ 18.
applied for the purpose of determining the ‘due date’
about the applicability
amendment has been brought in the Act to provide certainty
this contribution. In order to
belated payment of employees’
of Section 43B in respect of or not one has
to apply
amendment brought in later is retrospective
test whether the Snowtex Investment
Hon’ble Supreme Court in
the case of M/s
laid by the
the test as laid down on this
Hon’ble Supreme court
took note of the law
Ltd. (supra) wherein the of
Vatika Township Ltd.
and held that the intent
the Constitution Bench in M/s the
issue by ascertaining whether
need to be looked into for
the Parliament/legislature the Hon’ble
or not. In Vatika
Township Ltd. (supra)
should be retrospective
amendment Finance Bill will throw
clauses appended to the
held that the notes on
Supreme Court borne in mind that
because it has to be
legislative intent;
light as to the before an amendment
is brought in,
aware of three concepts
Parliament/legislature is are (i)
Clauses” to the Bill which
discerned from reading of the “Notes on
which can be retrospective
amendment
amendment with effect
from a fixed date; (ii)
prospective amendments which are
anterior date; and (i) clarificatory
with effect from a fixed that the
whether the view of Ld CIT(A)
nature. So when we adjudicate
retrospective in look at the “Notes
is retrospective, let us
2 brought in by Finance Act, 2021 to
explanation Finance Bill, 2021 (supra) pertaining
on Clauses and the
relevant clauses 8& 9 of the
out the intention of
hand which in clear and unambiguous terms spells
the issue in therefore will
amendment shall take effect
from 1st April, 2021 and
Parliament that the So since the
Assessment Year 2021-22
and subsequent years.
accordingly apply to
brought in by Finance Act,2021 onthisissue
legislative intentisclear,theamendment erred in holding otherwise. So till AY 2021-22,
and Ld. CIT(A)
as discussed is prospective view in favor of
Court’s
will hold good and is binding on
assessee
Jurisdictional High
the Court in Bharat Hotels Ltd.
the decision of the Hon’ble Delhi High
us. As discussed
L.T.A No. 48/AGR/2021 10
stpra nich , as in favor of re venue has not considered the decision of the Co0
ordinate Division bernch decision in M/s Aimil Ltd.(supra) which is in favour of assessee
Sc e c t e that fater decision of the Delhi/Hyderabad Tribuna! have foliowed the
r i n g assessee in the ight of the Hon’ble Supreme Court decision in M/s
Veretatie Preducts (supra in the light of the aforesaid decision and reiying on the ratio
thre case cf Vatika Township Pyt. Ltd (supra) and M/s
4eter,ent itd isupra) and also taking note of the binding decision of the
Hon’ble Jurisdictional Calcutta High Court on this i5sue before us in Shri Vijayshree Ltd
Lta isupra), M/s Philips Carbon Black Ltd (supra), M/s Coal india Ltd isupral, M/s Akzo
obe india impugned order of Ld CiT(A) and direct the AO
ite (supra), we set aside the
esam ci deduction in respect of ernployeescontribution sharestowards ES
PF by the assessee before the due date of filing of return u/s 139(1) of the Act.
Therefore the appeai of assessee succeeds and so, it is allowed in favor of assessee ”
the amendment in the statute is
in nature, therefore respectfully Following the decision of the
prospective
coordinate bench in the matter of Luminous, supra we alow the appeal of
the a5e: cee
– – 2J-
(Dr. MITHA LAL MEENA)
(LALIEKTMAR)
ACCOUVTANT 1EVBER JUDICIALMEMBER
CTAppea. sj
DR:ITAT
True Copy By Order
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