The Case Overview

The Income Tax Appellate Tribunal, Delhi Bench ‘G’, presided over by Shri Kul Bharat, Judicial Member, and Shri Pradip Kumar Kedia, Accountant Member, adjudicated the appeal filed by Kamal Dixit against the Assessing Officer (AO) Ward-2, Sonepat for the assessment year 2019-20. The appeal, marked under case number ITA 847/DEL/2022, was decided on 19th May 2022.

Grounds of the Appeal

Kamal Dixit, the appellant, contested the orders passed by the AO regarding the disallowance of employee contributions to Provident Fund (PF) and Employee State Insurance (ESI) due to delayed deposits. The main argument was centered around the interpretation of sections 36(1)(va) of the Income Tax Act, 1961, and the impact of the amendments brought by Finance Act, 2021.

Arguments and Judgment

The tribunal, after hearing both sides and considering various precedents, ruled in favor of the appellant. It was held that the contributions towards PF/ESIC, although delayed, were deposited before the due date of filing the return of income. Thus, disallowance was not justified. The tribunal referenced multiple judgments including the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. and clarified that the amendment introduced by Finance Act, 2021, applying from 1st April 2021 onwards, did not impact the assessment year in question.

Conclusion and Impact

The Tribunal’s decision underscores the importance of the actual payment date concerning the due date for filing of return of income over the technical delays in depositing the employee contributions towards PF and ESI. This judgment sets a precedent for similar appeals and provides clarity on the treatment of such contributions under the Income Tax Act, especially in light of recent amendments. Ultimately, the appeal filed by Kamal Dixit was allowed, marking a successful challenge against the initial assessments made by the AO Ward-2, Sonepat for the assessment year 2019-20.