In the case of Jonny, Meerut versus the Income Tax Officer, Ward-67(4), Delhi, the central issue revolves around the disallowance of delayed employees’ contributions to Provident Fund (PF) and Employee State Insurance (ESI) for the assessment year 2018-19 under ITA No. 1566/DEL/2021.
Jonny, a resident of Meerut, faced a tax challenge regarding the timeliness of contributions to employee welfare schemes. The appeal was made against the order of the Income Tax Officer based on the amendments brought by the Finance Act 2021, which were contested as being inapplicably retrospective.
The tribunal referred to precedents, notably the High Court of Delhi’s ruling in CIT vs. AIMIL Ltd., which highlighted the legislative intent not to penalize employers for delayed payments if made before filing the tax return. The tribunal’s decision was in favor of Jonny, reversing the lower authority’s disallowance.
This case underscores the ongoing issues surrounding the timing of statutory contributions and the interpretation of legislative changes affecting such contributions. The ruling provides clarity on the allowance of PF and ESI contributions if made before the tax return is filed, reinforcing the non-punitive nature of the legislative intent regarding employee contributions.
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