This article explores the case of Supreme Securities Limited versus DCIT, CPC, Bangalore, concerning the disallowance of delayed employee contributions to PF and ESI for the assessment year 2018-19 under ITA No. 1565/DEL/2021.
Supreme Securities Limited faced disallowances for the delayed deposit of employee contributions to Provident Fund (PF) and Employee State Insurance (ESI) for the assessment year 2018-19. The key issue was whether these contributions, deposited after the prescribed deadlines but before the income tax return filing date, should be disallowed.
The appeal challenged the applicability of the Finance Act 2021 amendments to the case, arguing that these should not be applied retrospectively. The tribunal reviewed similar cases and precedents, notably the decision in CIT vs. AIMIL Ltd. and the jurisprudence surrounding the timing of such deposits.
The tribunal ultimately ruled in favor of the appellant, directing that since the deposits were made before the filing of the return of income, they should not be disallowed. This decision aligned with previous rulings that emphasized the intent of the legislature to encourage timely compliance without unduly penalizing employers for technical delays.
The case of Supreme Securities Ltd. reaffirms the importance of understanding legislative amendments and their applicability. It highlights the ongoing debates in tax jurisprudence regarding employer obligations and the timing of contributions to employee welfare funds.
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