This article delves into the tribunal case of Hans Rubber & Sports Pvt. Ltd. against the order of the National Faceless Appeal Centre (NFAC) for the assessment year 2019-20, focusing on the legal proceedings and implications of the tribunal’s decision.
The appeal, ITA No. 915/DEL/2021, filed by Hans Rubber & Sports Pvt. Ltd., Meerut, challenged the disallowance of deductions under section 36(1)(va) of the Income-tax Act for delayed payments of employees’ contributions to EPF and ESI.
The appellant argued that despite the delay in depositing the employees’ contributions within the statutory period, all contributions were made before the due date of filing the income tax return, citing precedents set by various tribunal decisions supporting such claims.
The tribunal noted that similar cases had been decided in favour of the assessee where delayed payments of employees’ contributions to welfare funds, if made before the due date of filing tax returns, were allowed as deductions. This aligns with the amendments introduced by the Finance Act 2021, which clarified ambiguities regarding the timing of such deposits.
The tribunal’s decision to allow the appeal underscores the importance of understanding the intricate tax regulations and the judicial precedence that shapes their application. This case serves as a critical reference for corporate entities dealing with similar issues regarding the timing of employee contributions to statutory funds.
Case Review of ITA 915/DEL/2021: Hans Rubber & Sports Pvt. Ltd. vs DCIT, Circle-1, Meerut
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