Flourtech Engineers Pvt Ltd appealed against the CIT(A)’s decision which upheld the disallowances made on account of employees’ contributions to Provident Fund and ESI for the assessment year 2019-20.
The case centered on the timing of the deposits made by the company for employees’ contributions to Provident Fund and ESI, which were done beyond the prescribed due dates under respective acts but before the due date of filing the tax return.
The Supreme Court’s decision in Checkmate Services Pvt Ltd vs. CIT has established that such late deposits cannot be claimed as deductions, impacting how such contributions are handled in tax assessments.
The Income Tax Appellate Tribunal upheld the disallowance, agreeing with the lower authority that the late payment of these contributions fails the statutory requirements for timely deposit, thereby not qualifying for deductions under tax laws.
This decision underscores the importance of compliance with statutory timelines for depositing employees’ contributions to Provident Fund and ESI to avail tax deductions, aligning with the Supreme Court’s directives.
The tribunal’s decision reaffirms the need for strict adherence to legislative guidelines concerning employee contributions, highlighting the legal repercussions of non-compliance.
Flourtech Engineers Pvt Ltd vs. ACIT: Disallowance of PF and ESI Contributions for AY 2019-20
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