Case Number: ITA 864/DEL/2021
Appellant: Oynx Management Services Private Limited, Noida
Respondent: ITO, Circle-19(1), New Delhi
Assessment Year: 2018-19
Result: Disallowance Deleted
Case Filed on: 2021-07-16
Order Type: Final Tribunal Order
Date of Order: 2022-09-08
Pronounced on: 2022-09-08
Oynx Management Services Private Limited, Noida, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘E’, New Delhi, challenging the order passed by the Income Tax Officer (ITO), Circle-19(1), New Delhi, for the assessment year 2018-19. The appeal was regarding the disallowance of Rs. 85,17,014/- under section 36(1)(va) read with section 2(24)(x) of the Income-tax Act, 1961, related to employee contributions to Provident Fund and ESI deposited after the due date but before filing the return.
The case was heard by Shri N.K. Billaiya, Accountant Member, and Shri Kul Bharat, Judicial Member, on 08.09.2022, and the order was pronounced on the same day.
The main issue in the appeal was the disallowance of employee contributions to Provident Fund and ESI deposited after the due date prescribed under the respective Acts but before the filing of the return of income under the Income-tax Act.
The appellant argued that the contributions were deposited before the due date for filing the return of income under the Income-tax Act and thus should be allowed as deductions.
The respondent, represented by Shri Jeetender Chand, Sr.DR, relied on the provisions of the Income-tax Act and the recent amendments brought by the Finance Act, 2021, which clarified that the provisions of section 43B shall not apply to employee contributions and that these contributions should be deposited within the due dates specified under the respective Acts.
The Tribunal noted the relevant dates of deposits and the amounts involved, which were deposited after the due dates but before the filing of the return of income. The Tribunal relied on the jurisdictional High Court’s decision in the case of CIT Vs. AIMIL Limited (321 ITR 508), which held that employee contributions deposited before the filing of the return should be allowed as deductions.
The Tribunal also considered the amendments introduced by the Finance Act, 2021, and the explanations provided therein. Despite the amendments, the Tribunal observed that judicial decisions in favor of the assessee, including those by the jurisdictional High Court, still held precedence for the relevant assessment year.
After considering the facts, judicial precedents, and the arguments presented, the Tribunal directed the Assessing Officer to delete the disallowance of Rs. 85,17,014/- related to the employee contributions to Provident Fund and ESI.
In conclusion, ITA No. 864/DEL/2021 filed by Oynx Management Services Private Limited was allowed, with the Tribunal ordering the deletion of the disallowance of employee contributions to Provident Fund and ESI.
Order pronounced in the open court on 8th September 2022.
Sd/- (N.K. Billaiya)
ACCOUNTANT MEMBER
Sd/- (Kul Bharat)
JUDICIAL MEMBER
Date: 08.09.2022
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR: ITAT
Assistant Registrar, ITAT, New Delhi
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