This document delves into the specifics of the case ITA 1686/DEL/2021, wherein Nestor Pharmaceuticals Limited challenges the disallowances made by the CPC for the assessment year 2019-20, alongside its legal proceedings and outcomes.
The dispute in ITA 1686/DEL/2021 centers on the disallowances made by the Central Processing Centre (CPC), Bangalore, regarding the delay in deposit of employee contributions to EPF and ESI. The initial adjustments were made during the processing of the company’s tax returns under Section 143(1) of the Income Tax Act, which were later contested by the appellant.
The case was escalated to the CIT(A) and eventually to the Income Tax Appellate Tribunal (ITAT). The appellant argued that the disallowances were beyond the jurisdiction and scope of Section 143(1), asserting that the adjustments were improperly applied. The tribunal reviewed these claims alongside similar grounds presented in a related case for the previous assessment year.
The ITAT, referencing precedents set by the Delhi High Court in PCIT vs. Pro Interactive Service (India) Pvt. Ltd., found merit in the appellant’s arguments. The tribunal directed the Assessing Officer to delete the disallowance, citing that the legislative intent of the tax provision does not support treating delayed payments as deemed income under the specified conditions.
The tribunal’s decision in favoring the appellant underlines the importance of proper application of tax laws and timely contributions to employee welfare funds. This case serves as a significant reference for similar disputes, highlighting the necessity to adhere to procedural norms and the correct interpretation of legislative intents.
ITA 1686/DEL/2021 is a pivotal case that reinforces judicial scrutiny over tax adjustments and statutory interpretations, providing clarity on the limits and applications of Section 143(1) concerning employee contributions. The outcome not only benefits the appellant but also guides future proceedings in similar cases.
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