Case Number: ITA 1740/DEL/2020
Appellant: Transzone Logistics (India) Pvt Ltd, New Delhi
Respondent: DCIT CPC, Bangalore
Assessment Year: 2018-19
Case Filed On: 2020-10-21
Order Type: Final Tribunal Order
Date of Order: 2021-10-29
Pronounced On: 2021-10-29
The case involved Transzone Logistics (India) Pvt Ltd (the appellant), which challenged the disallowance of Rs. 6,86,922 made by the Assessing Officer (AO) for delayed deposit of employee’s Provident Fund (PF) and Employee State Insurance (ESI) contributions for the assessment year 2018-19. The disallowance was made under Section 36(1)(va) of the Income Tax Act. The appellant contended that the contributions, although delayed, were deposited before the filing of the return of income and therefore should not be disallowed.
The primary issue was whether the delayed deposit of employee’s PF/ESI contributions, if made before the filing of the return of income, justified disallowance under Section 36(1)(va) of the Income Tax Act.
The AO and the Commissioner of Income Tax (Appeals) [CIT(A)] upheld the disallowance based on the judgment in the case of CIT vs. Bharat Hotels Ltd., which supported the view that contributions must be deposited within the due dates prescribed under the respective Acts.
The ITAT, comprising Accountant Member Anil Chaturvedi, considered the submissions from both parties and reviewed the case record. Key findings included:
The ITAT ruled in favor of Transzone Logistics (India) Pvt Ltd, setting aside the disallowance made under Section 36(1)(va). The tribunal held that no disallowance was warranted as the contributions were deposited before the return filing date. The appeal for the assessment year 2018-19 was allowed.
This case highlights the importance of understanding the implications of delayed statutory contributions and the relevant judicial interpretations. The decision underscores the judiciary’s role in ensuring that fair practices are followed, taking into account the intent of the law and judicial precedents. The tribunal’s ruling provides clarity on the treatment of delayed PF/ESI contributions and reinforces the principle of following judgments that favor the assessee in cases of conflicting views.
Order pronounced in the open court on 29/10/2021 by Accountant Member Anil Chaturvedi.
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