This document provides a thorough analysis of the Income Tax Appellate Tribunal’s decision in ITA No. 1673/DEL/2021 for the assessment year 2019-20 involving Balraj from Sonepat. The case revolves around the disallowances made by the CPC under section 43(1) of the Income Tax Act concerning late deposit of PF/ESI contributions, taking into account the amendments introduced by the Finance Act 2021.
Balraj, the appellant, faced additions of Rs.2,112,070 for delayed contributions to employee welfare funds, which he contested due to the non-retrospective application of relevant amendments. This appeal addresses the Commissioner of Income-tax (Appeals)’s decision, which upheld the CPC’s findings.
The tribunal’s deliberation focused on interpreting the amendments to sections 36(1)(va) and 43B of the Income Tax Act, introduced by the Finance Act 2021. Despite the legislative changes, the tribunal supported the appellant, referencing judicial precedents that allow such contributions if made before the due date of filing the income tax return.
The decision underscores the critical nature of timing in depositing employee contributions to welfare funds and the effect of legislative changes on these timings. The tribunal’s reliance on existing judicial decisions and the non-retrospective nature of legislative amendments played a crucial role in the outcome.
The tribunal’s favorable ruling for Balraj could impact future cases involving similar disputes over the timing of welfare fund contributions and the interpretation of legislative changes. This case serves as an important reference for assessing the implications of delayed deposits under recent tax law modifications.
Detailed Review of ITA 1673/DEL/2021: Balraj vs. ITO, Ward-1, Sonepat
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