In the case of ITA 1770/DEL/2021, Rajesh Kumar Singh from Gurgaon filed an appeal against the Income Tax Officer (ITO), Ward-3(1), Gurgaon, challenging the disallowance of contributions towards Employee State Insurance (ESI) and Employees’ Provident Fund (EPF) for the assessment year 2018-19. The case was filed on November 26, 2021, and the final tribunal order was pronounced on February 28, 2022.
The appellant, Rajesh Kumar Singh, argued that the disallowance of ESI and EPF contributions was unwarranted as the payments were made before the due date of filing the income tax return. The appellant contended that the disallowance was contrary to the provisions of the Income Tax Act, 1961.
Rajesh Kumar Singh raised several grounds in his appeal, including:
The appeal was heard through video conferencing by the Delhi Bench ‘G’ of the Income Tax Appellate Tribunal, with Sh. Saktijit Dey, Judicial Member, and Dr. B. R. R. Kumar, Accountant Member, presiding over the case.
The appellant’s counsel, Mr. Upvan Gupta, argued that the contributions towards ESI and EPF were made before the due date of filing the income tax return under Section 139(1) and thus should not be disallowed. The counsel cited various judgments and tribunal orders supporting the appellant’s position.
The respondent, represented by Sr. DR Shri Umesh Takyar, contended that the disallowance was in accordance with the provisions of Section 36(1)(va) as the contributions were not deposited within the due dates prescribed under the respective statutes.
After hearing both parties and reviewing the case details, the tribunal observed that the contributions towards ESI and EPF were indeed made before the due date of filing the income tax return. The tribunal referred to the amendments introduced by the Finance Act, 2021, which clarified that the provisions of Section 43B apply to employee contributions if paid before the due date of filing the return under Section 139(1).
The tribunal noted that several judgments from various High Courts and the Supreme Court supported the appellant’s contention that such payments should be allowed as deductions if made before the due date of filing the return.
Based on the observations and legal precedents, the tribunal allowed the appeal filed by Rajesh Kumar Singh and directed the Assessing Officer to allow the deductions for the contributions towards ESI and EPF made before the due date of filing the income tax return. The tribunal’s decision reinforced the applicability of the amendments in the Finance Act, 2021, and upheld the principles of judicial consistency and fairness in tax assessments.
The appeal was allowed for the assessment year 2018-19, and the tribunal’s order was pronounced on February 28, 2022, by Sh. Saktijit Dey, Judicial Member, and Dr. B. R. R. Kumar, Accountant Member, of the Delhi Bench ‘G’ of the Income Tax Appellate Tribunal.
Rajesh Kumar Singh vs. ITO, Ward-3(1), Gurgaon: Appeal on Disallowance of ESI and EPF Contributions
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