The court reiterated strict compliance with statutory provisions for allowable employee contributions, distinguishing between employer and employee contributions under specific sections of the Income Tax Act.

ORDER

PER N.K. BILLAIYA, ACCOUNTANT MEMBER:-

This appeal by the assessee is preferred against the order dated 20.12.2021 by the NFAC, Delhi pertaining to A.Y. 2018-19.

2. The grievances of the assessee read as under:

I. That the Ld. CIT(A) erred both in law and in respect of facts of the case, while dismissing the appeal filed by the Appellant vide its order dated 20.12.2021 bearing order no. TBAINFAC/S/250/2021-2211037938846(1) under section 250 of the Income Tax Act, 1961 (the 'Act') for assessment year 2018- 19 and upholding the order passed by the CPC.

2. That the Ld. CIT(A) failed to appreciate the intent of law and amendments brought in by the Finance Act, 2021 wherein a clarificatory amendment was made in Section 36 and 43B of the Act to address the ambiguity. The amendment was necessary to provide the clarity in relation to allowability of employee contribution to various funds. The Ld. CIT(A) erroneously and over-zealously stated that the language and rationale for these amendments clearly indicate that these amendments are retrospective in nature. Further, the Ld. CIT(A) overlooked the fact that effective date for the purpose of applicability of these amendments is 1sl April, 2021. Consequently, the amendment is applicable to assessment year 2021-2022 and onwards. The Ld. CIT(A) completely ignored the fact that the case of the Appellant pertains to AY 2018-2019 where there was no bar on allowability of payment of employee contribution where such payment is made on or before the due date of filing of the return, as held by various courts in different cases.

3. That the Ld. CIT(A) failed to understand the Principles of Interpretation of Statutes and held the amendment made by the Finance Act, 2021 to be clarifactory or explanatory amendments and to be effective from date when the original provision was introduced. The Ld. CIT(A) completed ignored the fact that the memorandum to Finance Bill 2021 clearly states that these amendments are effective from 1 SI April, 2021 and will consequently apply to assessment year 2021-2022 and subsequent assessment years.

4. That the Ld. ClT(A) overlooked the precedents set by the Apex Court in case of Commissioner of Income Tax Vs. Vinay Cement Limited and Hon'ble Delhi High Court in the cases of Commissioner of Income Tax, Delhi Vs. Bharat Hotels Limited dated 06.09.2018 and Commissioner of Income Tax, Delhi Vs. AIMIL Limited, wherein it was held that employee contribution to statutory Labour welfare funds is an allowable expense, if paid on or before due date of return of income under section 139(1) of the Act and the Ld. CIT(A) completed overlooked and ignored the above precedents, thereby arbitrarily doubting the judgement of higher prevailing judicial authority.

5. That the CIT(A) replied upon the contrary judgements of other Hon'ble High Courts and completely ignored the precedents set by jurisdictional High Court and also the Hon'ble Supreme Court in its landmark judgement of Vegetable Products Limited wherein it was held that when two judgments are available giving different views then the judgment which is in favour of the Assessee.

6. That the Ld. CIT(A) completely ignored the fact that various judgements have been pronounced by the jurisdictional Hon'ble ITAT of Delhi in the case of Flying Fabrication Vs. Deputy Commissioner of Income-tax in the ITAT Delhi Bench 'B', Yogi Ji Technoequip (P.) Ltd. Vs. Deputy Commissioner of Income- tax CPC, Bengaluru tax in the IT AT Delhi Bench 'SMC-1' and Maksat Technologies (P.) Ltd.. Vs. Deputy Commissioner of Income-tax, Circle - 16(1), New Delhi in the ITAT Delhi Bench 'E' and the same are directly applicable in the case o