Summary of Income Tax Case Judgment: Delhi Bench

On April 25, 2022, the Income Tax Appellate Tribunal, Delhi Bench ‘G’, comprising Judicial Member Sh. Kul Bharat and Accountant Member Sh. Anil Chaturvedi, delivered a judgment concerning multiple appeals filed by assessees and Revenue against orders passed by the appellate authority for various assessment years.

Case Background

The appeals involved identical issues, hence were clubbed together for convenience, taking ITA No.1622/Del/2021 as a lead case. The primary grievance revolved around the confirmation of additions on account of delays in depositing employees’ contributions towards provident fund and ESI fund.

Arguments Presented

The assessees, represented by their respective counsels, argued against the additions based on delayed deposits, citing judicial precedents that supported deposit before the filing of the income return. The Revenue, represented by its counsels, supported the lower authority’s orders and referred to amendments brought by the Finance Act 2021.

Court’s Decision

The bench settled the issue in favor of the assessee, relying on judicial precedents and the jurisdictional High Court of Delhi, particularly citing the case of PCIT vs. Pro Interactive Service (India) Pvt. Ltd., where it was held that belated payment towards EPF and ESI could not be deemed as the employer’s income. The amendment by the Finance Act 2021, stated to be effective from April 1, 2021, was deemed not applicable for the assessment years in question.

Consequently, the appeals filed by the assessee were allowed, and the appeal filed by the Revenue was dismissed, reinforcing the viewpoint that contributions deposited before filing the return of income should not attract disallowance.

Conclusion

This judgment underscores the tribunal’s stance on prioritizing actual payment over the timing of such payments concerning employees’ contribution towards provident and ESI funds.