Date of Order: 22nd August 2023
Appellant: Perfect Arts, Faridabad
Respondent: ACIT, Circle-2(1), Faridabad
Perfect Arts appealed against the decision of the Commissioner of Income Tax (Appeals)-2, Bhubaneswar, which upheld the Income Tax Officer’s, CPC Bengaluru, action under Section 143(1) of the Income Tax Act, 1961. The core issue revolved around the disallowance of deductions claimed for employee contributions to Provident Fund and Employee State Insurance which were deposited after the due dates prescribed under the respective acts but before the due date of filing the tax return under Section 139(1).
The tribunal’s decision was guided by the precedent set by the Hon’ble Supreme Court in the case of Checkmate Services Pvt. Ltd vs CIT, which clarified the obligations and due dates for depositing employee contributions. The Supreme Court’s interpretation explicitly supported the view that contributions must be made within the statutory timelines to qualify for deductions. Perfect Arts’ contributions were made late, and thus, the tribunal dismissed their claim for deductions, adhering strictly to the legal requirements.
This decision highlights the strict compliance demanded by tax law in terms of timely deposit of employee contributions to Provident Fund and Employee State Insurance. It underscores the importance of adhering to prescribed timelines to avoid potential tax liabilities and penalties.
The dismissal of Perfect Arts’ appeals for the assessment years 2018-19 and 2019-20 reiterates the critical nature of timely compliance with tax obligations and the consequences of failing to meet these requirements.
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