Case Number: ITA 1070/DEL/2021
Appellant: Geeta Roy, New Delhi
Respondent: ITO, Ward-49(4), New Delhi
Assessment Year: 2018-19
Case Filed On: 2021-09-08
Order Type: Final Tribunal Order
Date of Order: 2022-02-28
Pronounced On: 2022-02-28
This case involves an appeal filed by Geeta Roy against the Income Tax Officer (ITO), Ward-49(4), New Delhi. The appeal was directed against the disallowance of employee contributions towards ESI and EPF for the assessment year 2018-19.
The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘G’, comprising Sh. Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member). The hearing was conducted via video conferencing.
The appellant, represented by Sh. Uplakshaya Kamboj, Advocate, raised several grounds against the order of the CIT(A), which confirmed the disallowance made by the Assessing Officer (AO) under Section 36(1)(va) of the Income Tax Act, 1961. The primary contention was that the contributions were deposited before the due date of filing the return under Section 139(1) and therefore should be allowed as deductions.
The respondent, represented by Shri Umesh Takyar, Sr. DR, argued that the disallowance was justified as the contributions were not deposited within the due dates prescribed under the respective Acts.
The tribunal reviewed the facts of the case and various judgments from different High Courts and the Supreme Court. It was noted that the controversy revolved around whether the disallowance under Section 36(1)(va) could be negated if the contributions were deposited before the due date for filing the return under Section 139(1).
The tribunal considered multiple precedents, including:
The tribunal also examined amendments brought by the Finance Act, 2021, and the explanatory memorandum, which clarified that Section 43B does not apply to employee contributions and aimed to ensure timely deposit of such contributions.
The tribunal concluded that based on the legislative amendments and judicial precedents, the disallowance of employee contributions to ESI and EPF under Section 36(1)(va) was justified if not deposited within the due dates specified under the respective Acts, despite being deposited before the due date for filing the return under Section 139(1).
The tribunal dismissed the appeal filed by Geeta Roy and upheld the disallowance made by the AO and confirmed by the CIT(A).
The tribunal’s decision underscores the importance of adhering to statutory due dates for depositing employee contributions towards welfare funds. This case highlights the distinction between employer and employee contributions and the legislative intent to ensure timely compliance.
Order Pronounced: February 28, 2022
By: Sh. Saktijit Dey (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member)
Source: Income Tax Appellate Tribunal, Delhi Bench ‘G’, New Delhi
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