This case involves appellant Chatru Mal Garg from Faridabad, Haryana, challenging the Income Tax Appellate Tribunal’s (ITAT) decision related to the disallowance of delayed Employees’ Provident Fund (EPF) and Employee State Insurance (ESI) payments for the assessment year 2018-19.
The appellant, represented by Shri Alok Gupta, CA, faced disallowances by the Commissioner of Income Tax Appeals (CITA) over alleged delays in depositing employees’ contributions to PF and ESI totaling an amount under dispute. The primary legal contention revolves around the applicability of recent amendments to Section 36(1)(va) and Section 43B of the Income Tax Act by the Finance Act 2021, and their retrospective application to past assessment years.
The tribunal, presided over by Shri Kul Bharat and Shri Pradip Kumar Kedia, considered similar past cases and precedents that supported the appellant’s position. Despite the amendments argued to apply retrospectively, the tribunal found these should apply prospectively from the assessment year 2021-22, supporting this with citations from relevant high court decisions.
The tribunal’s decision in May 2022 reversed the earlier disallowance, allowing the deduction claimed by Chatru Mal Garg and setting a precedent for similar cases. This outcome emphasizes the judiciary’s commitment to fairness, especially in procedural discrepancies concerning the timely deposit of statutory dues.
The detailed judgment underscores the importance of adhering to statutory timelines while granting relief to those who rectify their lapses within a permissible period.
Chatru Mal Garg vs ACIT, Circle-1, Faridabad: Dispute Over Delayed PF and ESI Contributions
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