This article examines the tribunal case of Gorkha Security Services vs DCIT concerning the assessment year 2018-19, where the appellant challenged the addition of Rs.29,09,838 for late deposits of employee contributions to PF and ESIC.
The appeal centers on the addition made by the Income Tax Department for late deposits under Section 36(1)(va) of the Income Tax Act. The primary contention from Gorkha Security Services was that the addition was unjust due to the timing of the deposits relative to the tax return filing deadline.
During the tribunal proceedings, the appellant argued that similar cases had been ruled in favor of the assessee by higher courts, including the Delhi High Court. The tribunal referenced several precedents, notably CIT vs. AIMIL Limited and SPL Industries vs. CIT, which supported the appellant’s view that contributions made before the filing of the income tax return should not be penalized.
The Tribunal’s decision to allow the appeal highlights the importance of timely legal interpretations and the impact of judicial precedents on tax assessments. It emphasizes that while compliance with tax laws is mandatory, the timing of such compliance relative to tax return deadlines holds significant weight in legal scrutiny.
The case of Gorkha Security Services vs DCIT is a pivotal example of how judicial decisions can influence tax administration practices and offer relief to taxpayers under specific circumstances.
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