The Income Tax Appellate Tribunal’s Delhi Bench ‘G’ reviewed ITA No. 1934/DEL/2022 on 21st September 2022, where Saran Motors P. Ltd. contested adjustments made by the Assessing Officer under ACIT, Circle-22(2), New Delhi. The adjustments were related to the late deposit of employees’ contributions towards Provident Fund (PF) and Employee State Insurance (ESI) for the fiscal year 2018-19.
The appellant argued that despite delays, all contributions were deposited before the filing of the income tax return, referencing decisions such as Azamgarh Steel & Power vs. CPC. The respondent supported the adjustment, noting legislative changes impacting the timing of such contributions.
The Tribunal, presided over by Shri Chandra Mohan Garg and Shri Pradip Kumar Kedia, concluded that the issue had been previously settled in favor of the assessee in similar cases. The bench pointed out that established jurisprudence suggested that as long as contributions are made before the tax filing, no penalties should apply. They referenced the decision in the case of PCIT vs. Pro Interactive Service, which aligned with the assessee’s argument.
The Tribunal ruled in favor of Saran Motors P. Ltd., allowing the appeals and reversing the disallowance made by the Assessing Officer. This decision reinforced the principle that timely corrective action regarding employee contributions could rectify compliance lapses in the eyes of tax law.
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