Amendment to Section 36(1)(va) of the Income Tax Act is prospective in nature: Delhi HC
Delhi High Court in the case of Pr. Commissioner of Income Tax -7 versus TV Today Network Ltd. held that the amendment to Section 36(1)(va) of the Income Tax Act is prospective in nature.
The Delhi High Court has allowed the assessee- TV Today Network Ltd.’s claims for deduction of expenses in nature of ‘consumption incentive’ offered to the advertisers for booking more advertisement space.
The bench of the Delhi High Court opined that the ‘due date’, in case of delay by the assessee in depositing the employees’ contribution to Provident Fund under Section 36(1) (va) of the Income Tax Act, 1961, is to be reckoned as the date for filing the return under Section 139 (1) and not the due date as prescribed under the relevant Labour statute. The Court added that the amendment to Section 36(1)(va), vide the Finance Act, 2021, is ‘for removal of doubts’ and hence, it cannot be presumed to be retrospective since it alters the law as it earlier stood.
The Assessing Officer (AO) passed an assessment order making certain additions to the assessee- TV Today Network Ltd.’s income, by disallowing certain expenses claimed by the assessee. The AO also made disallowances under Section 36(1)(va) of the Income Tax Act,1961 on the ground that the employees contribution towards the Provident Fund (PF) was deposited by assessee beyond the ‘due date’ as prescribed under the relevant Labour statute.
“It is also noted that in the facts of the case, the due date for depositing the Employees’ contribution to the Provident Fund was 20th April, 2012 and the assessee had deposited the same on 25th April, 2012. There is no dispute that the amount stands deposited before the filing of the return. We, therefore, find that there is no ground for taking a view different from the view consistently held by this court since AIMIL Ltd.(supra).”, the Court ruled.
The Court, thus dismissed the appeal of the revenue department.
The Judgement Order of the case is attached as under: