This analysis covers the ITAT Delhi’s ruling on Adinath Industries’ appeal against the ITO, Ward-50(1), Delhi, for the assessment year 2019-20 concerning the disallowance of deductions for delayed contributions to Provident Fund (PF) and Employees’ State Insurance (ESI).
The case emerges from orders issued by the National Faceless Appeal Centre (NFAC), Delhi, which rejected the deductions claimed by the assessee due to late deposit of employees’ contributions to PF and ESI.
The principal issue pertains to the allowability of deductions for employees’ contributions to PF and ESI that were not deposited by the prescribed statutory deadlines but were made before the due date of filing the return under section 139(1) of the Income-tax Act, 1961.
The tribunal considered the statutory requirements for timely deposit of employees’ contributions to PF and ESI, referring to the Supreme Court’s judgment in Checkmate Services Pvt. Ltd. vs CIT-I, which has established a precedent adverse to the assessee’s claims.
The ITAT dismissed the appeal, upholding the NFAC’s decision to disallow the deductions based on compliance failures with the prescribed time limits for depositing employees’ contributions to PF and ESI.
Adinath Industries vs. ITO, Ward-50(1), Delhi – ITA 2519/DEL/2022
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