Income Tax Appellate Tribunal Decision: Case of Ram Singh vs ITO Ward 3(1), Haryana

Income Tax Appellate Tribunal Decision: Case of Ram Singh vs ITO Ward 3(1), Haryana

Case Number: ITA 893/DEL/2022

This document presents a detailed analysis of the judgment passed by the Income Tax Appellate Tribunal, Delhi Bench ‘G,’ chaired by Shri Challa Nagendra Prasad (Judicial Member) and Shri Pradip Kumar Kedia (Accountant Member), in the case between Ram Singh from Haryana and the Income Tax Officer (ITO), Ward 3(1), also based in Haryana, pertaining to the assessment year 2018-19.

Background of the Case

The case under review involves an appeal filed by the appellant, Ram Singh, against the order of the lower authorities in favor of the respondent, the ITO Ward 3(1), Haryana. The crux of the matter revolves around the assessment year 2018-19, challenging the disallowance made under Section 36(1)(va) of the Income Tax Act, 1961, concerning employees’ contributions to ESI and PF deposited beyond the due date as per the relevant acts but before the due date for filing the return of income under Section 139(1).

Summary of the Final Judgment

The bench, after careful consideration of the arguments presented by both sides and previous judgements on similar matters, decided in favor of the appellant, allowing the appeal. The pivotal point in the appellant’s argument was that the contributions to PF and ESI were made before the due date for filing the income tax returns, hence complying with the requirements as per the jurisdictional High Court’s decisions.

The Tribunal clarified that while processing the return under Section 143(1) and during assessments under Section 143(3), disallowances for late payment of employees’ contributions to ESIC and PF are unjustified if said contributions were deposited before the due date for filing income tax returns. This interpretation aligns with the jurisdictional High Court’s stance and numerous tribunal decisions favoring the taxpayer under similar circumstances.

Implications of the Decision

This ruling has significant implications for both taxpayers and the revenue department. For taxpayers, it emphasizes the importance of complying with the statutory requirements of depositing employees’ contributions to various funds within the specified timelines to avail deductions under the Income Tax Act. For the revenue department, it underscores the need for a judicious application of the law, taking into consideration the legislative intent and judicial precedents.

The Tribunal’s decision in ITA 893/DEL/2022 serves as a precedent for similar cases, advocating for a fair and reasonable interpretation of the statutory provisions concerning the timing of deposits for employees’ contributions to ESI and PF. It reinforces the principle that compliance with the due date for filing income tax returns is sufficient for taxpayers to claim deductions for these contributions, thereby providing relief to those who deposit the contributions within this timeline.

Income Tax Appellate Tribunal Decision: Case of Ram Singh vs ITO Ward 3(1), Haryana