Case Number: ITA 713/DEL/2021
Appellant: Nitrex Chemicals India Ltd., New Delhi
Respondent: NeAC, New Delhi
Assessment Year: 2019-20
Case Filed On: 2021-06-15
Order Type: Final Tribunal Order
Date of Order: 2022-08-29
Pronounced On: 2022-08-29
Before: Shri Anil Chaturvedi, Accountant Member and Shri Challa Nagendra Prasad, Judicial Member
This appeal was filed by Nitrex Chemicals India Ltd. against the order of the Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi, dated 17.05.2021, for the assessment year 2019-20. The primary issue in this case involved the disallowance of employee contributions to Provident Fund (PF) and Employees’ State Insurance Corporation (ESIC) due to delayed deposits.
Nitrex Chemicals India Ltd. filed this case challenging the disallowance of employee contributions to PF and ESIC by the Assessing Officer (AO) on the grounds of delayed deposit. The appellant argued that all contributions were deposited before the filing of the return of income, and therefore, no disallowance should have been made.
The appellant raised the following grounds of appeal:
The appellant argued that although there was a delay in depositing the PF/ESIC contributions, all amounts were deposited with the appropriate authorities before the filing of the return of income. The appellant relied on various decisions of the Delhi High Court which supported their claim that no disallowance was warranted in such circumstances.
The Senior Departmental Representative (DR) supported the orders of the lower authorities and cited the decision of the Delhi Tribunal in the case of Vedvan Consultants Pvt. Ltd. vs DCIT in ITA No.1312/Del/2020, which was decided against the assessee. The DR also argued that the amendment brought by the Finance Act 2021, clarifying that provisions of Section 43B of the Act shall not apply to employees’ contributions, should be applicable to the present case.
The tribunal reviewed the case records, submissions of the Learned DR, and the relevant judicial precedents. The tribunal noted that the issue at hand was already settled in favor of the assessee by various judicial pronouncements, including decisions of the Hon’ble Delhi High Court.
The tribunal considered the following judicial precedents:
The tribunal concluded that the amendment brought by the Finance Act 2021, which clarified that the provisions of Section 43B shall not apply to employees’ contributions, would only be applicable from the assessment year 2021-22 onwards. Since the current case pertained to the assessment year 2019-20, the amendment was not applicable.
The tribunal found that the AO was not justified in denying the deduction claimed by the assessee on account of late deposit of PF/ESI/EPF, provided the contributions were deposited before the filing of the return of income. Since the Revenue did not contend that the contributions were deposited after the filing of the return, the tribunal allowed the appeal and directed the AO to delete the addition.
This summary provides an overview of the key points and conclusions from the ITAT order in the case of Nitrex Chemicals India Ltd. vs. NeAC for the assessment year 2019-20.
Nitrex Chemicals India Ltd. vs. NeAC – Case Filed on Employee Contribution to PF and ESIC
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