Case Number: ITA 962/DEL/2021
Appellant: Amar Ujala Ltd., New Delhi
Respondent: CPC ITD, Bengaluru
Assessment Year: 2019-20
Result: 2019-20
Case Filed on: 2021-08-12
Order Type: Final Tribunal Order
Date of Order: 2022-05-18
Pronounced on: 2022-05-18
Tribunal: IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH ‘G’, NEW DELHI
Before: Shri Kul Bharat, Judicial Member and Shri Pradip Kumar Kedia, Accountant Member
Introduction
This case involves Amar Ujala Ltd. appealing against the CPC ITD, Bengaluru regarding the late deposit of employee’s Provident Fund (PF) and Employee State Insurance (ESI) contributions for the assessment year 2019-20. The primary issue was whether the late deposit of these contributions, if made before the due date of filing the income tax return, should be disallowed.
Background
The appellant, Amar Ujala Ltd., faced disallowance of PF/ESI contributions by the Central Processing Centre (CPC), Bangalore, on the grounds that the contributions were deposited late. Despite the delay in deposits, all contributions were made before the filing of the income tax return.
The appellant argued that the deposits, though late, were within the permissible period and should not attract disallowance. The appellant relied on various judicial pronouncements, including the decisions in CIT vs. Alom Extrusions Ltd., CIT vs. Vinay Cement Ltd., and Pr. CIT vs. Raj. State Bev. Corpn. Ltd., which supported the view that late deposits made before the filing of the income tax return should be allowed as deductions.
Key Issues and Arguments
The primary grievance of the appellant was the confirmation of the additions made by the Assessing Officer (AO) on account of late deposit of PF/ESI contributions, despite the payments being made before the filing of the income tax return. The appellant contended that the amendments made by the Finance Act, 2021, clarifying the provisions of Section 43B and Section 36(1)(va) of the Income Tax Act, apply prospectively from assessment year 2021-22 and should not affect the assessment year in question.
Tribunal’s Analysis and Findings
The tribunal noted the following key points:
The tribunal referred to several judgments, including CIT vs. AIMIL Ltd., where it was held that the legislative intent was to ensure that the amounts paid are allowed as expenditures only when the payment is actually made. The judgments emphasized that belated payments of PF/ESI contributions should not be treated as income if deposited before the filing of the income tax return.
Judgment
The tribunal ruled in favor of the appellant, Amar Ujala Ltd., and quashed the disallowances made by the CPC ITD, Bengaluru. The tribunal directed that the PF/ESI contributions made before the filing of the income tax return should be allowed as deductions.
Conclusion
The appeal filed by Amar Ujala Ltd. was allowed. The tribunal quashed the disallowances and directed that the contributions made before the filing of the income tax return be allowed as deductions.
Final Judgment
Order pronounced in the open court on 18.05.2022.
Signed:
Shri Kul Bharat, Judicial Member
Shri Pradip Kumar Kedia, Accountant Member
Dated: 18.05.2022
Copy forwarded to:
Assistant Registrar, ITAT, New Delhi
Relevant Legal Provisions and Precedents
This case centered around the procedural aspects of the late deposit of PF/ESI contributions and the application of judicial precedents. The appellant’s compliance with the judicial rulings and the timing of the deposits were crucial in obtaining a favorable judgment.
Impact of the Judgment
This judgment highlights the importance of adhering to the provisions of judicial precedents regarding the late deposit of PF/ESI contributions and respecting the timelines for filing the income tax return. It underscores the need for procedural fairness and timely compliance by taxpayers.
Key Takeaways
The case emphasizes the significance of adhering to judicial precedents in tax matters and the necessity for tax authorities to apply the law consistently. It serves as a precedent for similar cases, reinforcing the allowance of deductions for late PF/ESI contributions made before the filing of the income tax return.
Amar Ujala Ltd. vs CPC ITD, Bengaluru: Late Deposit of PF/ESI for AY 2019-20
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