This analysis covers the appeal filed by Siddhi Enterprises against the decision of the National Faceless Appeal Centre (NFAC) for the assessment year 2019-20, focusing on the legal challenges and tribunal decisions regarding employee contributions to Provident Fund (PF) and Employee State Insurance (ESI).
The case ITA 913/DEL/2021 involves Siddhi Enterprises challenging the additions made by the Central Processing Centre (CPC) under section 143(1)(a) of the Income Tax Act, which were confirmed by the NFAC. The additions pertained to the disallowed employee contributions to ESI and PF due to late remittance.
The primary contention by Siddhi Enterprises was that the amendments introduced by the Finance Act, 2021, are prospective and do not apply to the assessment year 2019-20. The firm argued that since the contributions were made before the due date of filing the return, they should not be disallowed.
The Tribunal noted that the issue is covered by the decision in CIT Vs. AIMIL Ltd., where it was held that no disallowance could be made if the payments are made before the due date of filing the return of income. Consequently, the Tribunal directed the CPC to delete the disallowance for the contributions to PF and ESI.
The Tribunal’s decision in favor of Siddhi Enterprises reinforces the principle that legislative changes have a prospective effect unless explicitly stated otherwise. This case highlights the importance of understanding the nuances of tax law amendments and their application to different assessment years.
Review of ITA 913/DEL/2021: Siddhi Enterprises vs ITO, Ward-44(1), New Delhi 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