This case review discusses the appeal of Cogwheel Facility Management Pvt Ltd against the decision of the CIT(A) which upheld the addition made by the AO due to late payment of PF and ESI contributions under Section 36(1)(va) of the Income Tax Act.
The company filed its return declaring an income, which was later adjusted by the AO citing late deposit of employees’ PF and ESI contributions. Despite rectification requests and appeals to the CIT(A), the addition was upheld, leading to this appeal to the ITAT.
The ITAT reviewed similar cases and judicial precedents, particularly focusing on whether such contributions deposited before the due date of tax return filing should be allowed as deductions. The tribunal considered various high court and ITAT rulings, ultimately deciding in favor of the assessee.
The ITAT allowed the appeal, directing the AO to delete the disallowance, emphasizing the importance of timely deposit of employees’ contributions to PF and ESI and its compliance implications under the Income Tax Act.
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