Banarsi Das Vs. ITO, Ward-1(3), Gurgaon

CASE DETAILS

Case Number: ITA 897/DEL/2022
Appellant: Banarsi Das, Haryana
Respondent: ITO, Ward-1(3), Gurgaon
Assessment Year: 2018-19
Result: Allowed

SUMMARY OF FINAL JUDGMENT

This document outlines the judgment for the ITA 897/DEL/2022 case, held before the Income Tax Appellate Tribunal, Delhi Bench. Challenged by Banarsi Das against the ITO, Ward-1(3), Gurgaon, this case pertains to the assessment year 2018-19. The core issue revolves around the disallowance made under Section 36(1)(va) of the Income Tax Act, 1961, regarding the employee’s contribution to ESI and PF deposited after the due date under the relevant Acts but before the due date for filing the return of income per Section 139(1) of the Act.

The Tribunal, headed by the Judicial Member and the Accountant Member, reviewed the submissions and the pertinent legislative amendments and precedents. It recognized the debatable nature of disallowances concerning the contribution towards employees’ ESI and PF. Notably, recent amendments and judicial pronouncements have clarified respective provisions, aiming to settle ongoing controversies.

Emphasizing on the legal stance that contributions made before the actual filing of the income tax return do not warrant disallowance, the Tribunal cited various High Court decisions supporting this interpretation. Furthermore, it observed that the Finance Act, 2021 amendments, being prospective, do not influence the case’s outcome. Consequently, the Tribunal ruled in favor of the appellant, Banarsi Das, allowing the appeal and directing the deletion of the disallowance related to the employee’s contribution to ESI and PF.

The Tribunal highlighted the significance of judicious interpretation of statutory provisions and judicial rulings, underscoring the intent to ensure compliance without penalizing taxpayers for procedural delays, provided the contributions are eventually made within the framework defined by the Income Tax Act.

CONCLUSION

In conclusion, the case of Banarsi Das vs. ITO, Ward-1(3), Gurgaon, marks a pivotal point in interpreting the legislative and judicial guidelines regarding the timing of employees’ contribution to welfare funds. By ruling in favor of the appellant, the Tribunal sets a precedent that may influence similar cases, emphasizing the spirit of compliance over procedural technicalities. This judgment reaffirms the principles of fairness and reasonableness in taxation, encouraging a more nuanced understanding of the law among taxpayers and authorities alike.

Banarsi Das Vs. ITO, Ward-1(3), Gurgaon