While disposing of 47 appeals, the Agra ITAT, on Monday ruled that the amendment in provision 43B of the Income Tax Act, 1961 vide Finance Act, 2021 whereby the Government denied the deduction of contribution towards ESI and PF beyond the due date and before the filing of income tax returns will not be applicable to matters prior to 2021.
The appellants contended before the Tribunal that because the impugned disallowances under section 36(1)(v)(a),confirmed by the Ld. CIT(A) (NFAC) (of Employees Contribution to Provident Fund/ E.S.I deposited during the Financial Year itself before the due date of filing of Return) is grossly arbitrary, highly unjust, unwarranted, perverse, wrong, illegal, and bad in law.
The Tribunal bench comprising of Shri Anil Chaturvedi, Accountant Member and Sh. Laliet Kumar, Judicial Member held that recently in the matter of Mahadev Cold storage, the coordinate bench had the occasion to deal with the issue of disallowance under section 43B of the act and after elaborate examining the law on the subject,it was held that the disallowance under section 43B of the act is not permissible if the assessee had made the contribution before the due date of filing of the return ofincome.
“The same principle continues to hold good for issue under consideration as the assessment years underconsideration, are much prior to the year of amendment which was inserted in the Act byFinance Act 2021, which had provided the consequence of not depositing the amount within the time provided by the act resulting into the disallowance of the contribution made by the assessee. The aforesaid view of the amendment is not applicable to the assessment years prior to AY 2021 has been followed by various benches of the Tribunal,” the Tribunal said.
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