ORM Engineering P.Ltd, based in Faridabad, faced legal scrutiny regarding the late payment of Provident Fund (PF) and Employee State Insurance (ESI) contributions for the assessment year 2019-20. This case, documented under ITA No.2285/DEL/2022, was adjudicated by the Income Tax Appellate Tribunal, Delhi Bench ‘G’.
The tribunal session was overseen by Shri Shamim Yahya, Accountant Member, and Shri Challa Nagendra Prasad, Judicial Member. The core issue revolved around the timeliness of the PF & ESI contributions made by ORM Engineering P.Ltd. According to statutory requirements, such contributions are required to be made within specific deadlines under the relevant Acts. However, ORM Engineering made these payments beyond the due dates but before the filing of the tax return under section 139(1) of the Act.
The tribunal referenced the decision of the Supreme Court in the case of Checkmate Services Pvt. Ltd. (2022), which set a precedent that contributions paid beyond the due date specified under respective Acts must be added back to the income of the assessee. Accordingly, the tribunal did not find any errors in the decision of the lower CIT (A) and upheld the additions made to the income of ORM Engineering P.Ltd regarding the late payments.
The ruling highlights the strict interpretation of statutory deadlines for PF & ESI contributions and the financial implications for failing to meet these deadlines. It serves as a crucial reminder for all corporations about adherence to fiscal responsibilities and the legal consequences of delays.
The tribunal dismissed all appeals filed by the assessee, affirming the decision of the lower authorities. This case marks a significant affirmation of the judicial stance on timely financial compliance by corporations in India.
Judicial Analysis of ORM Engineering P.Ltd vs ACIT, Circle-2(1), Faridabad, ITA No.2285/DEL/2022
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