Bholeshwar Chopra vs ITO, Ward 68(6), New Delhi

Bholeshwar Chopra vs ITO, Ward 68(6), New Delhi

Case Number: ITA No. 1183/DEL/2022

Assessment Year: 2019-20

Appellant: Bholeshwar Chopra, Respondent: ITO, Ward 68(6), New Delhi

Order Date: June 15, 2022

Summary of Judgment

The Income Tax Appellate Tribunal (ITAT), Delhi, gave its judgment in favor of the appellant, Bholeshwar Chopra, in the case against Income Tax Officer, Ward 68(6), New Delhi. The appeal was filed for Assessment Year 2019-20 under case number ITA 1183/DEL/2022. The main contention was regarding the disallowance made under Section 36(1)(va) of the Income Tax Act, 1961, in respect of employees’ contribution to ESI and PF deposited after the due date under the relevant Acts but before the due date for filing return of income under Section 139(1) of the Act.

The ITAT held that the amendments brought in by the Finance Act, 2021, which clarified the provisions related to employees’ contribution to ESI and PF, were not applicable retrospectively. They reiterated the principle laid down by the Supreme Court in the case of Vinay Cements Ltd., advocating that if such contributions were made before the due date of filing the return of income, no disallowance could be made. Thus, the Tribunal directed the Assessing Officer to delete the disallowance made under Section 36(1)(va) of the Act, providing relief to the assessee.

The judgment emphasizes the Tribunal’s stance on ensuring that employees’ contributions, which are deposited within the allowed time frame, should not be disallowed, thus affording a degree of leniency to assessee who comply with the regulations in substance, if not in the strict timelines as prescribed under the respective employee benefit Acts.

Bholeshwar Chopra vs ITO, Ward 68(6), New Delhi