In the case of Amar Udyog versus the Income Tax Officer, Ward-1(1), Faridabad, the primary issue involves the disallowance of employee contributions to Provident Fund (PF) and Employee State Insurance (ESI) under sections 36(1)(va) and 2(24)(x) of the Income Tax Act for the assessment year 2018-19.
Amar Udyog, located at Plot No. 76, Sector-25, Faridabad, Haryana, contested the disallowance of employee contributions to PF and ESI that were deposited beyond the due date but before the filing of the income tax return. The Assessing Officer (AO) disallowed these contributions, leading to a significant increase in the taxable income.
The tribunal, led by Judicial Member C. M. Garg and Accountant Member Dr. B. R. R. Kumar, addressed the appeal filed by Amar Udyog. The tribunal considered the conflicting judgments from various High Courts and the specific details of the case. Ultimately, the tribunal ruled in favor of the appellant, Amar Udyog, by remanding the matter back to the Assessing Officer for re-examination in light of the recent Supreme Court judgment.
The tribunal discussed several key issues:
The tribunal’s decision underscores the importance of understanding the legislative intent and the distinction between employer and employee contributions. By remanding the matter back to the Assessing Officer, the tribunal reinforced the position that employee contributions deposited before the return filing due date should be re-examined in light of the Supreme Court’s ruling in Checkmate Services P. Ltd. vs. Commissioner of Income Tax-I.
Order pronounced in the open court on 31st August, 2023.
C. M. Garg
Judicial Member
Dr. B. R. R. Kumar
Accountant Member
Amar Udyog vs ITO on Employee Contributions Disallowance for AY 2018-19: ITA 1573/DEL/2021
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