ORM Engineering P.Ltd vs. ACIT, New Delhi – ITA No. 950/DEL/2022

Income Tax Appellate Tribunal Decision: ORM Engineering P.Ltd vs. ACIT

Case Number: ITA 950/DEL/2022

Appellant: ORM Engineering P.Ltd, Faridabad

Respondent: ACIT, New Delhi

Assessment Year: 2018-19

Judicial Members: Shri Challa Nagendra Prasad, Judicial Member and Shri Pradip Kumar Kedia, Accountant Member

Summary of Judgment

The appellant, ORM Engineering P.Ltd from Faridabad, emerged successful in the case against the ACIT from New Delhi for the assessment year 2018-19. The examining issues revolved around the deductions under Section 36(1)(va) and the applicability of Section 43B per the Income Tax Act of 1961 regarding employees’ contributions to ESI and PF.

The tribunal meticulously reviewed submissions from both sides, alongside various precedents and statutory provisions. Considerable emphasis was placed on the amendments introduced by the Finance Act, 2021, specifically concerning the deductions for employees’ contributions towards ESI and PF, made beyond the due dates under respective acts but before the income tax return filing deadline under Section 139(1).

Central to the tribunal’s findings was the determination of the nature of these amendments – whether they were clarificatory or retrospective in effect. The bench leaned on various judicial pronouncements, including the landmark judgment in the case of ‘CIT Vs. AIMIL Ltd. 321 ITR 508,’ which set a precedent for allowing deductions if the payments were made before the return filing deadline. Subsequent decisions reaffirming this view were also deliberated upon, providing a robust foundation for the tribunal’s verdict.

In concluding, the tribunal allowed the appeal in favor of ORM Engineering P.Ltd, thereby directing the ACIT to delete the disallowances made towards the employees’ contributions to ESI and PF, considering these were deposited before the due date for filing of the income tax return.

ORM Engineering P.Ltd vs. ACIT, New Delhi – ITA No. 950/DEL/2022