Date of Order: 20th June 2023
Appellant: Bimla Thakur, New Delhi
Respondent: DCIT, Circle-43(1), New Delhi
This appeal by Bimla Thakur is against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 20/10/2022 which was a result from an intimation dated 28/10/2021 passed under section 143(1) of the Income Tax Act, 1961 for the Assessment Year 2020-21. The main contention involves the disallowance of Rs. 82,32,430 on account of late deposit of employees’ contribution to Provident Fund/ESI under section 36(1)(va) and the rejection of the deduction under section 43B for employer contributions paid before the due date of return filing under section 139(1).
The appellant argued that the contributions were made, albeit slightly late, and contended that the disallowances were unjustified particularly where the tax audit report did not mandate such disallowances under section 143(1)(a)(iv). The Tribunal considered precedents and statutory provisions, leading to a discussion on whether such disallowances were appropriate under section 143(1) processing and the applicability of judicial decisions in similar cases.
The Tribunal’s decision focused on the procedural correctness of the disallowances made by the CPC and upheld by the CIT (A). The issues were remanded for a re-examination to verify the actual dates of payment and to reassess their taxability in light of recent judgments. The alternate plea for deduction under general provisions for deduction of expenditure under section 37 was dismissed as not applicable.
The appeal raised significant questions on the interpretation of tax laws concerning employee contributions to social welfare schemes and their impact on tax liabilities. The case was allowed for statistical purposes, indicating a remand for further verification and ruling based on factual accuracy of payment timings and compliance with statutory guidelines.
Bimla Thakur vs. DCIT, Circle 43(1), New Delhi – Assessment Year 2020-21
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