Case Number: ITA 1783/DEL/2021
Appellant: Sahara India Financial Corporation Limited, Lucknow
Respondent: DCIT, TDS, Patna
Assessment Year: 2009-10 (Qtr-3 26Q)
Case Filed On: November 29, 2021
Order Type: Final Tribunal Order
Date of Order: November 1, 2022
Pronounced On: November 1, 2022
The case was heard by the Delhi Bench “A” of the Income Tax Appellate Tribunal, which included:
The appellant, Sahara India Financial Corporation Limited, filed an appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated September 30, 2021. The appeal was in response to the disallowance made under Section 200A concerning employees’ contributions to PF and ESI for the assessment year 2009-10 (Qtr-3 26Q).
Assessee By: Shri Dinesh Verma, Adv; Shri Hardeep Singh, CA; Shri Sarvesh Srivastava, Adv
Revenue By: Shri V. Praveen Sidharth, CIT-DR
The hearing took place on November 1, 2022, and the order was pronounced on the same day.
The tribunal examined the orders of the authorities below. The Central Processing Centre (CPC), Bengaluru, while passing the intimation under Section 143(1), disallowed the employees’ contributions towards PF and ESI. This disallowance was sustained by the Commissioner of Income Tax (Appeals), who observed that the amendments brought by the Finance Act, 2021, were retrospective and clarificatory in nature.
The tribunal referenced several decisions, including the case of Devendra Yadav vs. ITO (CPC) and Vansh Jain vs. DCIT, where similar disallowances were addressed. The tribunal held that the amendments to Sections 36(1)(va) and 43B of the Income Tax Act, brought by the Finance Act, 2021, apply prospectively from the assessment year 2021-22. Therefore, these amendments do not apply to the assessment year 2009-10 (Qtr-3 26Q).
The tribunal concluded that the employees’ contributions to PF and ESI, if paid before the due date for filing the income tax return under Section 139(1), should be allowed as deductions. Consequently, the disallowance made by the CPC and sustained by the CIT (A) was not justified.
In light of these findings, the tribunal directed the Assessing Officer to delete the disallowance of employees’ contributions to PF and ESI and recompute the income of the assessee.
The appeal of Sahara India Financial Corporation Limited was allowed, and the disallowance of employees’ contributions to PF and ESI was directed to be deleted.
The official order was signed and dated on November 1, 2022, by the tribunal members:
Chandra Mohan Garg
Judicial Member
Pradip Kumar Kedia
Accountant Member
Order Date: November 1, 2022
The order was distributed to:
The case was initially filed by Sahara India Financial Corporation Limited challenging the disallowance of employees’ contributions to PF and ESI for the assessment year 2009-10 (Qtr-3 26Q). The appellant sought relief from the disallowance made by the CPC and sustained by the CIT (A), arguing that the contributions were paid before the due date for filing the return of income under Section 139(1).
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