Beena Pillai ORDER
Chandra Poojari, Member (A)
1. These appeals at the instance of the assessee are directed against two orders of the CIT(A), both dated 27.09.2021, and it relate to assessment years 2018-2019 and 2019-2020.
2. The ground raised in both the appeals is identical, i.e., whether the CIT(A) is justified in disallowing employees' contribution to PF & ESI, which was paid before the due date of filing of the return of income u/s. 139(1) of the I.T. Act.
3. Since common issue is raised in these appeals, they were heard together and are being disposed of by this consolidated order.
3.1. The facts relating to the issue are that for the assessment years under consideration, the returns of income was filed by the assessee, declaring income of Rs. 51,68,984 for A.Y. 2018-2019 and Rs. 63,70,362 for A.Y. 2019-2020. The assessee was served with an intimation u/s. 143(1) of the I.T. Act determining total income at Rs. 57,68,984, for A.Y. 2018-2019 and Rs. 66,37,014 for A.Y. 2019-2020. The reason for the difference between the returned income and the income determined u/s. 143(1) of the I.T. Act was on account of disallowance of late remittance of employees' contribution to PF and ESI under the respective Acts.
4. Aggrieved by the intimation u/s. 143(1) of the I.T. Act, the assessee preferred appeals before the first appellate authority. It was stated that the assessee had paid the employees' contribution to PF and ESI prior to the due date of filing of the return u/s. 139(1) of the I.T. Act. Therefore, it was submitted that the assessee is entitled to deduction of employees' contribution to PF and ESI having regard to the provisions of section 43B of the I.T. Act. In this context, the assessee relied on the judgment of the Hon'ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd. Vs. DCIT, reported in MANU/KA/0136/2014 : 366 ITR 408 (Kar.). The CIT(A), however, rejected the appeals of the assessee. The CIT(A) noticed the difference between employer and employee contribution to PF and ESI and held that only employers contribution to PF and ESI is entitled to deduction u/s. 43B of the I.T. Act, if the same is paid prior to due date of filing of return of income u/s. 139(1) of the Act. It was further held that the amendment to section 36(1)(va) and 43B of the I.T. Act by Finance Act, 2021 is clarificatory and has got retrospective operation.
5. Aggrieved, assessee has filed these appeals before the Tribunal. The learned AR submitted that an identical issue was decided in favour of the assessee by the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DICT in ITA No. 385/Bang/2021 (order dated 21.10.2021).
6. The learned Departmental Representative supported the orders of the Income Tax Authorities.
7. We have heard the rival submissions and perused the material on record. On identical facts, the Bangalore Bench of the Tribunal in the case of M/s. Shakuntala Agarbathi Company Vs. DCIT (supra) by following the dictum laid down by the Hon'ble jurisdictional High Court in the case of Essae Teraoka Pvt. Ltd. Vs. DCIT (supra), had held that the assessee would be entitled to deduction of employees' contribution to PF and ESI provided that the payments were made prior to the due date of fi........