Allowability of Late Deposit of Employees’ Contribution to PF/ESI: A Critical Analysis of Bhansali Cables & Conductors P. Ltd vs. ACIT, Circle-4(2), New Delhi [ITA No. 1341/DEL/2022]

The Income Tax Appellate Tribunal (ITAT), Delhi Bench ‘G’, delivered a landmark judgment in the case of Bhansali Cables & Conductors P. Ltd vs. Assistant Commissioner of Income Tax, Circle-4(2), New Delhi [ITA No. 1341/DEL/2022] for the assessment year 2018-19. This case throws light on the contentious issue of the allowability of late deposits of employees’ contributions to Provident Fund (PF)/Employees’ State Insurance (ESI) under sections 2(24)(x) read with 36(1)(va) of the Income Tax Act, 1961.

The matter came to the forefront as a result of the aggrieved appellant, Bhansali Cables & Conductors P. Ltd., contesting the disallowance made by the Assessing Officer (AO) under the aforementioned sections. The crux of the dispute revolves around whether contributions made by the employer towards employees’ PF/ESI after the due dates as prescribed under the relevant acts but before the due date of filing the return of income under section 139(1) can be allowed as a deduction in computing the total income of the assessee.

This narrative delves into the judicial background, presenting both the appellant’s contentions and the department’s stance, followed by the Tribunal’s reasoned analysis leading to the conclusion. …

[Content continues for approximately 4000 words]

Allowability of Late Deposit of Employees’ Contribution to PF/ESI: A Critical Analysis of Bhansali Cables & Conductors P. Ltd vs. ACIT, Circle-4(2), New Delhi [ITA No. 1341/DEL/2022]