Case Number: ITA 934/DEL/2021
Appellant: Pasupati Spinning & Weaving Mills Ltd., Delhi
Respondent: DCIT, CPC, Bengaluru
Assessment Year: 2018-19
Result: 2018-19
Case Filed on: 2021-08-03
Order Type: Final Tribunal Order
Date of Order: 2022-05-17
Pronounced on: 2022-05-17
Tribunal: IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH ‘G’, NEW DELHI
Before: SHRI KUL BHARAT, JUDICIAL MEMBER and SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER
Introduction
This appeal by the assessee, Pasupati Spinning & Weaving Mills Ltd., pertains to the assessment year 2018-19 and is directed against the order of the Deputy Commissioner of Income Tax (DCIT), Central Processing Centre (CPC), Bengaluru. The primary issue revolves around the disallowance of employee contributions towards Provident Fund (PF) and Employee State Insurance (ESI) on account of delayed deposits.
Background
The appellant, Pasupati Spinning & Weaving Mills Ltd., located at 127-128, Tribhuvan Complex, Mathura Road, Ishwar Nagar, New Delhi, filed an appeal against the disallowance of employee contributions to PF and ESI. The contributions were disallowed by the CPC, Bengaluru, on the grounds that they were deposited beyond the due date prescribed under the respective Acts. Aggrieved by this decision, the appellant filed an appeal before the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘G’.
Hearing and Decision
The appeal was heard on 17th May 2022. The appellant was represented by Shri Vipin Jain, CA, while the respondent was represented by Shri Sanjay Kumar Nargas, Sr. DR.
The Tribunal clubbed this appeal with several others involving similar issues for the sake of brevity and convenience, disposing of them by way of a consolidated order.
Tribunal’s Observations
The Tribunal noted that the sole grievance of the assessee was the confirmation of additions on account of delayed deposits of employee contributions towards PF and ESI. The Tribunal observed that though there was a delay in the deposits, all contributions had been made before the filing of the return of income. It cited various judicial pronouncements, including the Hon’ble Delhi High Court’s judgment in the case of PCIT vs Pro Interactive Service (India) Pvt. Ltd., which held that the legislative intent was to allow the expenditure when payment was made, and belated payments should not be treated as deemed income.
Regarding the amendment brought by the Finance Act 2021, the Tribunal clarified that it applies prospectively from 01st April 2021 and does not affect the assessment year under consideration.
The Tribunal concluded that the Assessing Officer was not justified in denying the deduction claimed by the assessee, provided the contributions were deposited before the due date of filing the return of income.
Conclusion
The appeal filed by Pasupati Spinning & Weaving Mills Ltd. was allowed, and the disallowance on account of delayed deposits of employee contributions towards PF and ESI was deleted. The decision was pronounced in the open court on 17th May 2022.
Order
In the result, the appeal filed by the assessee is allowed. The above decision was pronounced in the open court on 17th May 2022.
Signed:
[PRADIP KUMAR KEDIA]
ACCOUNTANT MEMBER
[KUL BHARAT]
JUDICIAL MEMBER
Dated: 17th May 2022
Copy forwarded to:
Assistant Registrar
ITAT, New Delhi
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