The Income Tax Appellate Tribunal, Delhi Bench ‘B’, dealt with an appeal filed by Force Tech Security (India) P.Ltd against the DCIT, Circle-7, New Delhi for the assessment year 2018-19. The appeal challenges the order of the National Faceless Appeal Centre (NFAC), New Delhi, dated July 5, 2022, which pertained to the addition of Rs. 5,39,686 for the late deposit of employee contributions to Provident Fund (PF) and Employee State Insurance (ESI).
The key issue at hand was the correctness of confirming the addition of Rs. 5,39,686 on account of delays in depositing employee share of ESI & PF under Section 36 of the Income Tax Act, 1961. Despite the absence of the assessee or its representative at the hearing, the Tribunal proceeded to adjudicate the appeal based on the merits of the case as presented in the documents and arguments by the senior Departmental Representative (DR).
The Tribunal discussed the applicability of the Supreme Court’s judgment in Checkmate Services (P.) Ltd. vs CIT, which clarified the taxability of belated employee contributions to Provident Fund/ESIC. The discussion extended to whether such additions could be adjusted under Section 143(1) of the Act during the processing of the return of income. The Tribunal upheld the adjustment made by the Central Processing Centre (CPC) as being in line with the latest judicial precedents, thereby dismissing the appeal of Force Tech Security (India) P. Ltd.
The decision highlights the ongoing legal interpretations and enforcement of tax liabilities concerning the timely deposit of employee contributions to PF and ESI, emphasizing compliance with statutory timelines to avoid tax liabilities and penalties.
Force Tech Security (India) P.Ltd, New Delhi vs. DCIT, Circle-7, New Delhi (2018-19)
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