Case Number: ITA 1597/DEL/2021
Appellant: Devender Yadav, Haryana
Respondent: ITO, Ward-34(1)(6), New Delhi
Assessment Year: 2019-2020
Case Filed on: 2021-11-01
Order Type: Final Tribunal Order
Date of Order: 2022-04-27
Pronounced on: 2022-04-27
In the matter of Devender Yadav versus ITO, Ward-34(1)(6), New Delhi, the appeal was filed by Devender Yadav against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 01.10.2021. The case involves the disallowance of employee contributions to Provident Fund (PF) and Employees’ State Insurance (ESI) under Section 36(1)(va) of the Income Tax Act for the assessment year 2019-20.
The case was heard before the Delhi Bench “SMC” of the Income Tax Appellate Tribunal, with Judicial Member Shri Challa Nagendra Prasad presiding. The appeal was taken up for hearing on 09.03.2022 and the decision was pronounced on 27.04.2022.
The appellant, represented by CA Manoj Garg, argued that the issue was covered by the Tribunal’s decision in the appellant’s own case for the assessment year 2018-19 (ITA No. 1100/Del/2021, dated 23.12.2021). The appellant contended that the contributions to PF and ESI were paid before the due date for filing the income tax return under Section 139(1) of the Act, and thus, should be allowed as a deduction.
The respondent, represented by Sr. DR Shri Om Prakash, supported the orders of the authorities below, arguing that the disallowance was justified based on the amendments introduced by the Finance Act, 2021.
After considering the submissions and reviewing the material on record, the tribunal made the following observations:
The tribunal noted that the appellant had relied on the Tribunal’s decision in his own case for the previous assessment year, where the disallowance of PF and ESI contributions was deleted. It was observed that the appellant had deposited the employee contributions to PF and ESI before the due date for filing the return of income under Section 139(1) of the Act.
The tribunal referred to the settled legal principle that delayed payment of contributions to PF and ESI, including employee contributions, is allowable as a deduction under Section 43B read with Section 36(1)(va) if paid before the due date for filing the return of income. The tribunal also considered the amendments introduced by the Finance Act, 2021, which were applicable prospectively from the assessment year 2021-22.
The tribunal held that the disallowance of Rs. 21,56,580/- made by the Assessing Officer was not justified, as the appellant had paid the contributions before the due date for filing the return of income. The tribunal directed the Assessing Officer to delete the disallowance.
The tribunal allowed the appeal filed by Devender Yadav, granting relief on the ground of disallowance of PF and ESI contributions. The order was pronounced in the open court on April 27, 2022.
Order:
In the result, the appeal of the assessee is allowed.
Order pronounced in the open Court on April 27, 2022.
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(C.N. PRASAD)
JUDICIAL MEMBER
Date: April 27, 2022
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