Case Number: ITA 1777/DEL/2020
Appellant: Alqimi India Private Limited, Gurgaon
Respondent: DCIT CPC, Bangalore
Assessment Year: 2018-19
Case Filed On: 2020-10-26
Order Type: Final Tribunal Order
Date of Order: 2022-07-27
Pronounced On: 2022-07-27
The appeal by Alqimi India Pvt. Ltd. challenges the disallowance of EPF and ESIC amounts under Sections 2(24)(x) and 36(1)(va) of the Income Tax Act, contending improper application and interpretation by the Assessing Officer (AO) during the AY 2018-19.
The initial order by the AO was challenged on the grounds that it was based on an incorrect assessment of deductions related to employee provident fund (EPF) and employee state insurance scheme (ESIC). The matter escalated to the Tribunal after the CIT(A)’s affirmation of the AO’s decision.
The Tribunal noted that the matter had been settled in favor of the taxpayer in various precedents, specifically citing the jurisdictional High Court’s ruling which supported the assessee’s position that late payment of EPF and ESIC does not transform into employer income under the Act. The Tribunal’s decision allowed the appeal, overturning the earlier disallowances.
This decision is significant for employers regarding the timing of EPF and ESIC payments and their impact on taxable income. It clarifies the legal stance on such deductions and ensures compliance with the legislative intent of the Income Tax Act. The ruling underscores the necessity of adhering to judicial precedents and legislative amendments while assessing such deductions.
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