This analysis covers the Income Tax Appellate Tribunal (ITAT) Delhi’s decision on the appeal by Nipun Gupta against disallowances for delayed Provident Fund (PF) and Employee State Insurance (ESI) contributions, marking a significant case for understanding adjustments under Section 36(1)(va) of the Income Tax Act.
The appeal pertains to the assessment year 2018-19, where the Centralized Processing Center (CPC), Bangalore, made disallowances on delayed PF and ESI contributions. Nipun Gupta challenged these adjustments, leading to a tribunal review.
The main issue revolved around whether PF and ESI contributions deposited by the due date for filing returns could still be disallowed due to their initial delay. The tribunal referenced several precedents, including a notable judgment from the Delhi High Court, which has historically sided with the assessee under similar circumstances.
During the proceedings, the applicability of the Finance Act, 2021 was discussed, particularly amendments clarifying the non-applicability of Section 43B to such cases. The tribunal noted that these amendments are prospective and do not affect the assessment year in question.
The tribunal’s decision to allow Gupta’s appeal underscores the importance of precise timing in contributions and the evolving interpretations of related tax provisions. This case adds to the jurisprudence on how delayed contributions for PF and ESI should be handled in light of recent legislative changes.
Order Date: 2022-05-17
Judges: Shri Kul Bharat, Judicial Member and Shri Pradip Kumar Kedia, Accountant Member
Case Analysis: Nipun Gupta vs. DCIT on PF and ESI Contributions Disallowance – ITA 1430/DEL/2021
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