Sun Airvoice Pvt. Ltd. vs ACIT, Delhi for AY 2018-19: ITA Allowed

Sun Airvoice Pvt. Ltd. vs ACIT, Delhi for Assessment Year 2018-19

Case Number ITA 1181/DEL/2022: ITA Allowed

This case review discusses the appeal filed by Sun Airvoice Pvt. Ltd. against the order of ACIT, Circle 24(2), New Delhi, for the assessment year 2018-19. The appeal, marked ITA 1181/DEL/2022, was allowed in favor of the appellant, Sun Airvoice Pvt. Ltd.

Judges Presiding:

• Challa Nagendra Prasad, Judicial Member
• Pradip Kumar Kedia, Accountant Member

Background of the Case

The case addresses the disallowance made under Section 36(1)(va) of the Income Tax Act, 1961, concerning employees’ contributions to ESI and PF deposited after due dates under the relevant acts but before the return filing due date under Section 139(1) of the Act. Despite the discharge of notices, no appearance was observed on behalf of the assessees, and no adjournments were sought.

Final Judgment Summary

The bench addressed the disputable nature of the disallowance towards contributions to employees’ PF and ESI. It referenced various cases and the amendments brought by the Finance Act, 2021, which clarified that the provisions of Section 43B do not apply to employees’ contribution to ESI and PF if such contributions are deposited within the due date for filing of income tax return. The judicial precedence set by the jurisdictional High Court in the case of CIT Vs. AIMIL Ltd was applied, which aligns with the dismissal of disallowance if payment is made before the income tax return filing due date.

The Tribunal ordered the Assessing Officer/CPC to delete the disallowance of employees’ contributions to EPF and ESI as the contributions were remitted before the due date for filing the return of income. Consequently, the appeal by Sun Airvoice Pvt. Ltd. was allowed.

Impact of Judgment

This ruling clarifies the treatment of employees’ contributions to ESI and PF regarding their deposit timelines. It underscores the non-applicability of Section 43B to such contributions if deposited before the filing due date of the income tax return, providing relief and a clear guideline for numerous assessees facing similar issues.

Sun Airvoice Pvt. Ltd. vs ACIT, Delhi for AY 2018-19: ITA Allowed