Case Number: ITA 709/DEL/2021
Appellant: Radford Global Limited, Mumbai
Respondent: ADIT, CPC, Bangalore
Assessment Year: 2019-20
Case Filed On: 2021-06-14
Order Type: Final Tribunal Order
Date of Order: 2022-02-10
Pronounced On: 2022-02-10
Before: Shri Kul Bharat, Judicial Member
This appeal was filed by Radford Global Limited against the order of the CIT(A)-23, New Delhi, dated 12.04.2021, for the assessment year 2019-20. The primary issue in this case was the disallowance of Rs. 21,96,923 on account of delayed deposit of employees’ contributions to Provident Fund (PF) and Employees’ State Insurance Corporation (ESIC).
Radford Global Limited filed this case challenging the addition of Rs. 21,96,923 made by the Assessing Officer (AO) under section 36(1)(va) of the Income Tax Act, 1961, due to the delayed payment of employees’ contributions to PF and ESIC, despite the payments being made before the due date for filing the income tax return under section 139(1).
The appellant raised the following grounds of appeal:
The appellant argued that the disallowance was unwarranted as the contributions were deposited before the due date for filing the return of income. They relied on various judicial precedents, including decisions by the Hon’ble Delhi High Court in the case of CIT vs. AIMIL Ltd and PCIT vs. Pro Interactive Service (India) Pvt. Ltd.
The Senior Departmental Representative (DR) opposed the appellant’s submissions, relying on the decision of the Hon’ble Delhi High Court in the case of CIT vs. Bharat Hotels Ltd., which supported the Revenue’s stance.
The tribunal reviewed the case records and the submissions of both parties. The CIT(A) had upheld the disallowance based on the provisions of section 36(1)(va) and the newly inserted Explanation 2 to section 36(1)(va) and Explanation 5 to section 43B by the Finance Act, 2021. These explanations clarified that the provisions of section 43B do not apply to employees’ contributions to PF and ESIC, and the due date for such contributions is the date prescribed under the respective Acts.
The tribunal considered the following judicial precedents:
The tribunal, relying on the judgments of the Hon’ble Delhi High Court in the cases of AIMIL Ltd. and Pro Interactive Service (India) Pvt. Ltd., concluded that the disallowance made by the AO was not justified. The tribunal directed the AO to delete the disallowance of Rs. 21,96,923, thereby allowing the appeal in favor of Radford Global Limited.
This summary provides an overview of the key points and conclusions from the ITAT order in the case of Radford Global Ltd vs. ADIT, CPC Bangalore for the assessment year 2019-20.
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