Case Number: ITA 1214/DEL/2021
Appellant: Advance Ventilation Private Limited, New Delhi
Respondent: DCIT CPC, Bangalore
Assessment Year: 2019-20
Case Filed on: 2021-09-23
Order Type: Final Tribunal Order
Date of Order: 2022-05-17
Pronounced on: 2022-05-17
The case of Advance Ventilation Pvt. Ltd. vs DCIT, CPC, Bangalore, revolves around the disallowance of employee contributions to Provident Fund (PF) and Employees’ State Insurance (ESI) due to delayed deposits. The core issue is whether such disallowances are justified under the provisions of the Income Tax Act, 1961, particularly under Section 36(1)(va).
IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH ‘G’, NEW DELHI
BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
Sr. No. | ITA No(s) | Asst. Year(s) | Appeal(s) by | Appellant | vs. | Respondent | Assessee By | Revenue By |
---|---|---|---|---|---|---|---|---|
10. | 1214/Del/2021 | 2019-20 | Advance Ventilation Pvt. Ltd. | DCIT, CPC, Bangalore | –None– | –do– |
The case of Advance Ventilation Pvt. Ltd. was taken up for hearing on 17.05.2022. The appeals were heard together and disposed of through a consolidated order, considering the common issue across multiple cases regarding the disallowance of employee contributions to PF/ESI due to delayed deposits.
The tribunal noted that the issue of delayed deposits of employee contributions had been settled in favor of the assessee by various judicial pronouncements. The Hon’ble Jurisdictional High Court of Delhi, in PCIT vs. Pro Interactive Service (India) Pvt. Ltd., held that such contributions deposited before the filing of the return should not be disallowed.
The tribunal observed that the amendment by Finance Act, 2021, explicitly states that it applies prospectively from 01st April 2021, hence not applicable to the assessment year under consideration (2019-20).
Consequently, the tribunal ruled in favor of the assessee, allowing the appeal and directing the deletion of the disallowance made by the CPC, Bangalore.
The Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by Advance Ventilation Pvt. Ltd., directing the Revenue to delete the disallowance of employee contributions to PF and ESI for the assessment year 2019-20, as these were deposited before the due date of filing the return. The tribunal’s decision was based on established judicial precedents and the clear legislative intent that the amendment introduced by Finance Act, 2021, does not apply retrospectively.
This judgment reinforces the principle that contributions deposited before the return filing date should not be disallowed, providing clarity and relief to taxpayers in similar circumstances.
Order Pronounced: 17.05.2022
By: (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER and (KUL BHARAT) JUDICIAL MEMBER
Advance Ventilation Pvt. Ltd. vs DCIT: Dispute Over Employee Contributions for AY 2019-20
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform