This document presents a detailed analysis of the Income Tax Appellate Tribunal decision in ITA No. 1672/DEL/2021 for the assessment year 2018-19 involving Balraj from Sonepat. The case addresses the issue of disallowances made by the CPC under section 43(1) of the Income Tax Act on account of the late deposit of PF/ESI contributions, considering the amendments introduced in the Finance Act 2021.
Balraj, the appellant, faced additions of Rs.2,181,023 for delayed contributions to employee welfare funds, which he contended were unjustified due to non-retrospective application of the relevant amendments. This appeal was against the order of the Commissioner of Income-tax (Appeals), which upheld the CPC’s decision.
The tribunal’s decision revolved around interpreting the amendments to sections 36(1)(va) and 43B of the Income Tax Act, which were introduced by the Finance Act, 2021. Despite the amendments, the tribunal favored the appellant, citing precedents that allowed such contributions if made before the due date of filing the income tax return.
The decision underlines the importance of timing in depositing employee contributions to welfare funds and the impact of legislative changes on such timings. The tribunal’s reliance on judicial precedents and the non-retrospective nature of the legislative amendments played a crucial role in the decision.
The tribunal’s ruling in favor of Balraj could influence future cases involving similar disputes over the timing of welfare fund contributions and the interpretation of legislative amendments. This case serves as a significant reference for assessing the implications of delayed deposits in light of recent changes to tax laws.
Analysis of ITA 1672/DEL/2021: Balraj vs. ITO, Ward-1, Sonepat
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