This document offers a comprehensive review of ITA No.1824/DEL/2020, in which Aroon Facilitation Management Services Pvt Ltd contests the disallowance of Rs.9,59,624 due to delayed payments of employee contributions to PF and ESI during the assessment year 2018-2019.
The case originates from a disallowance made by the CPC under section 143(1)/154 for the late payment of PF & ESI contributions. The assessor’s contention that the payments, though late per statutory deadlines, were made before the tax filing deadline was not initially accepted by the CIT(A) who upheld the CPC’s decision.
The appellant leveraged several precedents, including the Delhi High Court’s ruling in CIT vs. AIMIL Ltd., advocating that contributions made before the tax return filing deadline should not attract penalties. Despite these arguments, the CIT(A) sided with earlier rulings like CIT vs. Bharat Hotels Ltd., maintaining the disallowance.
The tribunal reversed the CIT(A)’s decision, aligning with the appellant’s view and recent legislative amendments, emphasizing that compliance with payment before the tax return deadline suffices for relief from penalties. This decision could influence future interpretations and applications of related tax laws.
The resolution of ITA No.1824/DEL/2020 provides crucial insights into the handling of employee contributions to statutory funds concerning tax filings. This analysis navigates through the tribunal’s reasoning and its implications for tax compliance and planning.
Analysis of ITA 1824/DEL/2020: Aroon Facilitation Management’s Challenge Against Disallowance
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