Date of Order: September 21, 2022
This case addresses the dispute over the delay in depositing employee contributions to Provident Fund (PF) and Employee State Insurance (ESI) by Mohinder Nath Behl, which led to a disagreement on the tax deductions claims for the assessment year 2019-20.
Mohinder Nath Behl, the appellant, challenged the Income Tax Officer’s (ITO) decision to disallow tax deductions for PF and ESI contributions that were deposited late according to the statutes but before the filing of the tax return. The case, ITA No. 2039/DEL/2022, was presented before the Income Tax Appellate Tribunal in Delhi.
During the hearing, there was no representation from the appellant’s side, while the respondent was represented by Ms. Kajal Singh, Sr.D.R. The tribunal reviewed the case and referred to precedents and amendments relating to the tax treatment of late PF and ESI contributions.
The Tribunal concluded that, following precedent, if contributions are made before the filing of the tax return, they should be considered for deductions. This aligns with prior judicial decisions that emphasize actual payment over adherence to statutory deadlines for the purpose of tax deductions.
The decision reaffirmed the principle that for tax deductions regarding employee contributions to PF and ESI, the critical factor is the actual payment before the tax filing deadline, not merely meeting statutory deadlines. This ruling is significant for taxpayers and advisors, illustrating the importance of understanding both the statutory requirements and the practical aspects of tax compliance.
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