B.R. Baskaran ORDER
B.R. Baskaran, Member (A)
1. The assessee has filed this appeal challenging the order dated 16.12.2021 passed by Ld. CIT(A), National Faceless Appeal Centre, Delhi and it relates to the assessment year 2019-20. The only issue urged in this appeal relates to disallowance of Rs. 4,07,792/-, being employees contribution to provident fund and employees state insurance, u/s. 36(1)(va) of the Income-tax Act, 1961 ['the Act' for short].
2. The assessee filed its return of income on 10.10.2019. The same was processed u/s. 143(1) of the Act, wherein the disallowance u/s. 36(1)(va) of the Act was made on the ground that the employees contribution to PF and ESI totalling to Rs. 4,07,792/- has been paid by the assessee beyond the due date prescribed in the respective Acts.
3. The assessee challenged the above said addition by filing appeal before Ld. CIT(A) contending that the disallowance should not be made, since the above said payments have been made prior to the due date prescribed u/s. 139(1) of the Act. In this regard, the assessee relied on the decision rendered by jurisdictional Karnataka High Court in the case of M/s. Essae Teraoka Pvt. Ltd. Vs. Deputy Commissioner of Income-tax (Karnataka HC) in ITA No. 480/2013. However, the Ld. CIT(A) rejected the contentions of the assessee by following the amendment brought in by the Finance Act, 2021 in sections 43B and 36(1)(va) of the Act and also following certain decisions rendered by Tribunals. Aggrieved, the assessee has filed this appeal before the tribunal.
4. The contention of the assessee was that it has remitted the employees contribution of PF & ESI before the due date prescribed u/s. 139(1) of the Act, even though the contributions were paid in few instances beyond the due date prescribed in the respective Statutes. We also notice the above said fact from column 20(b) of the Tax audit report furnished along with the appeal memo and a perusal of the same would show that the assessee has remitted the payments before the due date prescribed u/s. 139(1) of the Act for filing return of income for AY 2019-20.
5. The question whether the payments made beyond the due date prescribed under respective statutes, but before the due date prescribed u/s. 139(1) of the Income tax Act was considered and 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). The learned Departmental Representative supported the orders of the Income Tax Authorities.
6. We heard both parties and perused the 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 filing of the return of income u/s. 139(1) of the I.T. Act. It was further held by the ITAT that amendment by Finance Act, 2021, to section 36[1][va] and 43B of the Act is not clarificatory. The relevant finding of the ITAT in the case of M/........