This case, ITA No. 535/Del/2021, adjudicated by the Income Tax Appellate Tribunal Delhi Bench, involves United Security Solution Pvt Ltd, which filed an appeal against the order of the Commissioner of Income Tax (Appeals)-9, New Delhi. The issue at hand was the treatment of delayed employee contributions to PF/ESI under the Income Tax Act.
The case arose from an adjustment made by the CPC under section 143(1) which was contended by the appellant as being beyond the authority granted by the law, specifically relating to the timeliness of employee contributions to provident funds and ESI. The key legal contention was whether these delayed deposits could qualify for deductions under sections 36(1)(va) and 43B of the Act.
The tribunal referenced a recent Supreme Court decision in Checkmate Services P. Ltd. vs CIT, which established that employee contributions paid beyond the due dates set by the relevant acts are not deductible. This ruling was pivotal to dismissing the appeal of United Security Solution Pvt Ltd, aligning with the interpretation that such contributions, if delayed, do not qualify as deductible expenses under the specified tax provisions.
The Tribunal’s decision emphasized the strict interpretation of tax laws regarding employee contributions, underscoring the need for timely compliance by businesses to avail tax benefits. The dismissal of this appeal sets a precedent that reinforces the compliance requirements and the repercussions of not adhering to statutory deadlines.
Order pronounced in the open court on February 7, 2023.
ITA 535/DEL/2021: United Security Solution Pvt Ltd vs DCIT CPC Ward-27(1), New Delhi for AY 2018-19
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