Case Number: ITA 1793/DEL/2021
Appellant: Bhupender Kumar, R/o Village Palasoli, Bas Padamka, Distt-Gurugram, Rewari, Haryana
Respondent: Assessing Officer, Ward-1, Rewari, Haryana
Assessment Year: 2018-19
Case Filed On: November 30, 2021
Order Type: Final Tribunal Order
Date of Order: April 28, 2022
Pronounced On: April 28, 2022
The case was heard by the Delhi Bench “SMC” of the Income Tax Appellate Tribunal, which included:
The appellant, Bhupender Kumar, filed an appeal against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated August 25, 2021. The appeal concerned the disallowance of employees’ contribution to PF and ESI under Section 143(1) of the Income Tax Act, 1961.
Assessee By: None
Revenue By: Shri Om Prakash, Sr. DR
The hearing took place on March 15, 2022, and the order was pronounced on April 28, 2022.
The assessee raised the following grounds of appeal:
The sole grievance of the assessee was the confirmation of additions on account of delay in the deposit of employee’s contributions towards the provident fund (PF) and ESI fund. The assessee argued that although there was a delay in the deposit, all contributions were made before the filing of the return of income. They relied on the decision in Devendra Yadav vs. ITO (CPC) in ITA No. 1100/Del/2021 dated December 23, 2021.
The Revenue, represented by the Learned DR, supported the lower authorities’ orders and cited the case of Devendra Yadav vs. ITO (CPC) in ITA No. 1100/Del/2021 dated December 23, 2021. They argued that the amendment brought by Finance Act 2021 clarified that Section 43B does not apply retrospectively.
The tribunal noted that the issue is no longer res-integra and has been settled in favor of the assessee by various judicial pronouncements. The Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs. Pro Interactive Service (India) Pvt. Ltd. ITA No. 983/2018 dated September 10, 2018, held that belated payment of Employee’s Provident Fund (EPF) and Employee’s State Insurance (ESI) is not treated as deemed income of the employer if paid before the due date of filing the return of income.
The tribunal found that the amendment brought by Finance Act 2021, effective from April 1, 2021, applies to assessment years 2021-22 and subsequent years, and does not apply to the assessment year under consideration.
The Revenue did not provide any material to demonstrate that the cited order was overruled or set aside by a higher judicial forum. Thus, the tribunal concluded that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, provided it was before filing the return of income.
The tribunal allowed the appeals filed by the assessee and dismissed the appeal of the Revenue.
The official order was signed and dated on April 28, 2022, by the tribunal member:
Challa Nagendra Prasad
Judicial Member
Order Date: April 28, 2022
The order was distributed to:
The case was filed by Bhupender Kumar challenging the disallowance of employees’ contribution to PF and ESI made during the assessment year 2018-19. The appellant sought relief from the disallowance made by the CPC and sustained by the CIT (Appeals), arguing that the contributions were legitimate and remitted before the due date for filing the return of income.
Bhupender Kumar’s Appeal on PF and ESI Contribution Disallowance for Assessment Year 2018-19
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform