Case Number: ITA 666/DEL/2021
Appellant: Ravinder Kumar Ahuja HUF, New Delhi
Respondent: ACIT, New Delhi
Assessment Year: 2018-19
Case Filed On: 2021-06-08
Order Type: Final Tribunal Order
Date of Order: 2022-02-28
Pronounced On: 2022-02-28
This article provides an in-depth analysis of the case ITA No. 666/DEL/2021, where Ravinder Kumar Ahuja HUF from New Delhi filed an appeal against the Additional Commissioner of Income Tax (ACIT), New Delhi. The appeal revolved around the eligibility of deductions under Section 36(1)(va) of the Income-tax Act for delayed Employees’ State Insurance (ESI) and Employees’ Provident Fund (EPF) contributions for the assessment year 2018-19.
Ravinder Kumar Ahuja HUF, with the PAN AAAHR2891E, filed an appeal against the ACIT concerning the assessment year 2018-19. The appeal was heard by the Delhi Bench ‘G’ of the Income Tax Appellate Tribunal (ITAT) through video conferencing on February 21, 2022. The order was pronounced on February 28, 2022.
The main legal issue in this case was the disallowance of Rs. XXXX under Section 36(1)(va) of the Income-tax Act, 1961. This section pertains to the deductibility of contributions received from employees towards ESI and EPF. The ACIT had disallowed the deductions on the grounds that the contributions were not deposited within the due date prescribed under the respective Acts. However, the contributions were deposited before the due date of filing the income tax return under Section 139(1) of the Act.
The case was heard by the ITAT bench comprising Sh. Saktijit Dey, Judicial Member, and Dr. B. R. R. Kumar, Accountant Member. The appellant was represented by Sh. Paramjit Khanna, CA, while the respondent was represented by Shri Umesh Takyar, Sr. DR.
The appellant argued that the contributions towards ESI and EPF, although deposited beyond the due date prescribed under the respective Acts, were made before the due date of filing the income tax return under Section 139(1). The appellant relied on various ITAT orders and High Court judgments that allowed such deductions if the payments were made before the due date of filing the return.
The respondent supported the disallowance made by the ACIT, arguing that the provisions of Section 36(1)(va) specifically required the contributions to be deposited within the due dates prescribed under the relevant Acts. The respondent cited judgments that supported this interpretation.
The tribunal reviewed the case and examined the relevant provisions of the Income-tax Act, 1961, including Sections 2(24)(x), 36(1)(va), and 43B. The tribunal also considered various judgments from different High Courts and ITAT benches on similar issues.
The tribunal referred to several judgments, including:
The tribunal also reviewed the amendments introduced by the Finance Act, 2021, which clarified that the provisions of Section 43B would not apply to employees’ contributions. The amendments were intended to settle the controversy and ensure that employers did not get unjustly enriched by delaying the deposit of employees’ contributions.
Income Tax Appellate Tribunal, Delhi Bench ‘G’, New Delhi
Before: Sh. Saktijit Dey, Judicial Member, and Dr. B. R. R. Kumar, Accountant Member
Order:
The tribunal, after considering the arguments and reviewing the relevant provisions and judgments, held that the delayed payment of employees’ contributions towards ESI and EPF would be allowable as a deduction if made before the due date of filing the income tax return under Section 139(1). The tribunal noted that the legislative intent and the amendments introduced by the Finance Act, 2021, supported this view.
Order Pronounced and Signed in Open Court on 28th February 2022.
Signed:
Sh. Saktijit Dey, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
Date: 28th February 2022
This case highlights the importance of understanding the interplay between different sections of the Income-tax Act and the judicial precedents that shape their interpretation. The tribunal’s decision provides clarity on the eligibility of deductions for delayed ESI and EPF contributions, aligning with the legislative intent to ensure timely deposits for the welfare of employees.
Ravinder Kumar Ahuja HUF vs. ACIT, New Delhi: Deduction Eligibility Under Section 36(1)(va), 2022
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