This case addresses the legal consequences of delayed employee contributions to Provident Fund (PF) and Employee State Insurance Corporation (ESIC) funds by Ishant Arora for the A.Y. 2020-21. The Income Tax Appellate Tribunal reviewed the appeal against the order of the National Faceless Appeal Centre which confirmed the tax addition for late deposits.
Ishant Arora, a proprietor of a shoe fabrication business, faced tax additions after a belated deposit of employee contributions to PF and ESIC. The ITAT confirmed the additions based on the Supreme Court’s ruling in Checkmate Services Pvt. Ltd., which mandates the addition of late payments to taxable income.
The appeal highlighted the dispute over whether the late deposit of employee contributions should be added back to the taxable income. The Tribunal confirmed the addition by following the precedent set by the Supreme Court, which held that any employee contribution paid beyond the due date specified under the relevant acts must be considered as taxable income.
h2>Conclusion
This case illustrates the strict compliance required for the timely deposit of employee contributions to PF and ESIC. The tribunal’s decision emphasizes the importance of adhering to statutory deadlines to avoid tax liabilities. The outcome aligns with judicial precedents that prioritize timely financial responsibility over subsequent corrections or justifications.
The final judgment was pronounced on March 10, 2023, dismissing the appeal and upholding the additions for delayed contributions.
Case Review: Ishant Arora vs. ITO on Delayed PF and ESIC Contributions, ITA No.2694/DEL/2022
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