This case addresses the appeal by P and G Enterprises Pvt. Ltd. against the order of the ld. Commissioner of Income Tax (Appeals), NFAC, regarding the disallowance of employee contributions to ESI and PF for the assessment year 2018-19.
The issue at hand originated from the Centralized Processing Centre in Bangalore, which during the processing of the company’s return under Section 143(1), disallowed employee contributions to PF and ESI. The appellant contested this decision, citing the amendments made by the Finance Act, 2021, arguing that they were prospective in nature and applicable from the assessment year 2021-22 onwards.
The tribunal reviewed the appellant’s arguments, referencing precedents set by the Hon’ble Delhi High Court and the Hon’ble Supreme Court. The tribunal acknowledged that the amendments were indeed prospective and that the contributions had been made before the due date for filing the return of income. Thus, they directed the CPC to delete the disallowances.
The decision emphasizes the importance of adhering to legislative amendments and their intended application dates, providing a significant relief to the appellant and setting a precedent for similar cases. The ruling underscores the judiciary’s role in interpreting tax laws and its implications for corporate tax liabilities.
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