This document provides a comprehensive overview of the Income Tax Appellate Tribunal’s decision on the appeal filed by Hisar Metal Industries Limited against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, regarding the belated payment of Employee’s Contributions to PF and ESI for the assessment year 2018-19.
The case revolves around an appeal filed by Hisar Metal Industries Limited challenging the order that sustained an addition made towards belated payments of employee contributions to Provident Fund (PF) and Employee State Insurance (ESI). The total addition amounted to Rs. 34,50,723 due to the delayed deposit of these contributions beyond the stipulated period prescribed under the respective Acts.
The tribunal examined whether the contributions that were not deposited within the prescribed period but before the filing of the income tax return should still be disallowed. The appellant contended that the contributions were indeed paid before the return filing and should not be disallowed. However, the Departmental Representative cited a Supreme Court ruling that established precedence for treating such belated contributions unfavorably.
After reviewing the submissions and relevant judicial precedents, the tribunal upheld the disallowance of the belated contributions. It emphasized that contributions deducted from employees’ salaries must be deposited within the specified timelines to comply with statutory requirements and to qualify for tax deductions.
The tribunal’s decision underscores the strict compliance required under tax laws regarding the timing of employee contributions to statutory funds like PF and ESI. This decision serves as a crucial reminder for all employers about the importance of timely compliance with statutory deductions to avoid legal complications and penalties.
The judgment aligns with established legal precedents that emphasize the employer’s obligation to deposit deducted amounts within the legal deadlines to claim deductions under the Income Tax Act.
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