The case number ITA 1728/DEL/2020 was filed by Urbanac Projects Pvt Ltd, New Delhi against the ITO Ward-27(2), New Delhi. This appeal pertains to the assessment year 2018-19 and was filed on October 19, 2020. The final order was pronounced on March 29, 2022, by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘G’. The tribunal’s decision addresses the disallowance of Provident Fund (PF) and Employee State Insurance (ESI) payments made beyond the due date specified under the respective acts.
Appellant: Urbanac Projects Pvt Ltd, located at E-52, New Mangalpuri, Mandi Road, Mehrauli, New Delhi-110030 (PAN: AAGCA8925M).
Respondent: ITO Ward-27(2), New Delhi.
The case was heard by Sh. N. K. Billaiya, Accountant Member, and Ms. Astha Chandra, Judicial Member.
The appeal filed by Urbanac Projects Pvt Ltd was against the disallowance of PF and ESI payments made beyond the due date specified under the respective acts. The disallowance was made by the Assessing Officer (AO) and confirmed by the Commissioner of Income Tax (Appeals), leading to the current appeal before the ITAT.
The appellant argued that the disallowance was not justified as the payments were made before the filing of the return of income and should be allowed as deductions.
The appellant’s representative, Sh. Nippun Mittal, CA, argued that the disallowance of PF and ESI payments was not justified as the payments were made before the filing of the return of income. He contended that various High Courts have ruled in favor of the assessee in similar cases, allowing such payments as deductions if made before the filing of the return.
The respondent, represented by Sh. Umesh Takyar, Sr. DR, maintained that the disallowance was justified as the payments were made beyond the due date specified under the respective acts.
The tribunal reviewed the arguments and evidence presented by both parties. It was observed that the issue of disallowance of PF and ESI payments has been settled in favor of the assessee by various High Courts, which have held that such payments should be allowed as deductions if made before the filing of the return of income.
The tribunal noted that the return of income was filed on December 6, 2018, and the PF and ESI contributions were deposited before this date. Therefore, the tribunal concluded that the payments should be allowed as deductions.
In light of the judicial precedents and the facts of the case, the tribunal directed the AO to delete the disallowance of Rs. 394,382/- on account of PF and ESI payments. The tribunal allowed the appeal in favor of the assessee, emphasizing the importance of consistency with judicial decisions and the principle of substantial justice.
As a result, the appeal filed by Urbanac Projects Pvt Ltd (ITA No. 1728/DEL/2020) for the assessment year 2018-19 was allowed.
The order was pronounced in the open court on March 29, 2022, by the tribunal members, Sh. N. K. Billaiya, Accountant Member, and Ms. Astha Chandra, Judicial Member.
Conclusion: This case underscores the importance of adhering to judicial precedents and ensuring fairness in the assessment process. The tribunal’s decision highlights that PF and ESI payments made before the filing of the return of income should not be disallowed solely based on the delay beyond the due date specified under the respective acts, aligning with the principle of substantial justice.
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