Case Number: ITA 1011/DEL/2021
Appellant: Naveen Kumar, Gurgaon
Respondent: ITO, Ward-1(5), Gurgaon
Assessment Year: 2018-19
Result: 2018-19
Case Filed on: 2021-08-25
Order Type: Final Tribunal Order
Date of Order: 2021-11-25
Pronounced on: 2021-11-25
This case involves an appeal filed by Naveen Kumar against the order dated 23.07.2021, passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, concerning the assessment year 2018-19. The dispute pertains to the addition made under Section 36(1)(va) of the Income Tax Act, 1961, regarding the delayed deposit of employees’ contributions towards Provident Fund (PF) and Employees’ State Insurance (ESI).
The pertinent facts relevant to the adjudication of the case are as follows:
The core issue to be adjudicated was whether the CIT(A) erred in confirming the addition of Rs. 3,10,435/- made by the AO under Section 36(1)(va) of the Income Tax Act.
The assessee argued that the payments on account of PF/ESI were made after the due date prescribed under the respective acts but before the due date of filing the return under the Income Tax Act. The assessee contended that various judicial decisions allowed such payments as deductible if made before the due date of filing the return.
The Revenue, represented by the Senior Departmental Representative (Sr. DR), relied on the orders of the AO and CIT(A) and argued that the amendments made by the Finance Act 2021 should be applied.
The Tribunal examined the facts of the case and noted that the payments on account of PF/ESI were made by the assessee after the due date prescribed under the respective acts but before the due date of filing the return under the Income Tax Act. The Tribunal observed that the issue in dispute is covered in favor of the assessee by various judicial decisions, including the cases of ITO vs. Aimil Ltd. and CIT vs. Nipso Polyfabriks Ltd.
The Tribunal also noted that the amendments made by the Finance Act 2021, which inserted Explanation 2 to Section 36(1)(va) and Explanation 5 to Section 43B, were effective from 01.04.2021 and were applicable to the assessment year 2021-22 and subsequent assessment years. Therefore, these amendments were not applicable to the assessment year 2018-19.
The Tribunal held that the CIT(A) erred in confirming the addition made by the AO under Section 36(1)(va). The appeal of the assessee was allowed, and the AO was directed to delete the addition of Rs. 3,10,435/-.
Order: In the result, the appeal of the assessee is allowed.
Order Pronounced in the Open Court on 25/11/2021.
-Sd/- (Suchitra Kamble, Judicial Member)
-Sd/- (Anadee Nath Misshra, Accountant Member)
Date: 25/11/2021
Copy forwarded to:
Assistant Registrar
ITAT, New Delhi
Naveen Kumar vs. ITO: PF and ESI Contribution Scrutiny for AY 2018-19
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