This document presents a comprehensive review of the ITA No.1823/DEL/2020, wherein Worldwide Facility Management Services Pvt Ltd challenges the disallowance of Rs.21,40,164 for delayed payment of employee contributions to PF and ESI for the assessment year 2018-2019.
The case originated from an order by the DCIT, CPC, which disallowed delayed payments made by the company, despite being completed before the tax filing deadline. The appeal escalated to the CIT(A), who upheld the original decision, citing precedents like the Bharat Hotels Ltd. case. Discontent with these outcomes, the appellant sought relief from the ITAT, arguing based on recent legislative changes and tribunal precedents favoring similar cases.
The tribunal, led by Shri R.K. Panda, deliberated on the application of recent amendments to Sections 36 and 43B of the Income Tax Act, which affect the treatment of delayed employee contributions. Referencing multiple tribunal decisions that support the appellant’s position, the tribunal overturned the CIT(A)’s decision, thereby allowing the appeal.
The outcome of this case holds significant implications for the treatment of employee contributions to PF and ESI within the framework of Indian tax law, particularly concerning the timing of payments relative to tax filing deadlines. This analysis explores the tribunal’s reasoning and its impact on future tax assessments and compliance strategies for corporations.
Examination of ITA 1823/DEL/2020: Worldwide Facility Management’s Appeal on Employee Contributions
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