The case of Supreme Housing Finance Ltd. vs Circle 24(2), New Delhi concerns the disallowance of Provident Fund (PF) and Employee State Insurance (ESI) contributions that were not deposited by the statutory due date for the assessment year 2018-19, though they were completed before the tax return filing date.
Supreme Housing Finance Limited, a company based in Delhi, faced issues with the Income Tax Department over the delayed deposit of employee contributions towards PF and ESI for the assessment year 2018-19. The contributions were delayed but made before the filing of the tax return.
The Income Tax Appellate Tribunal (ITAT), Delhi Bench, reviewed the case and considered the implications of amendments brought by the Finance Act 2021 which were argued to retrospectively disallow such contributions if not made by the due dates specified under respective acts.
The ITAT ruled in favor of the assessee, allowing the appeal and reversing the disallowance. The tribunal referenced the decision of the Delhi High Court in the case of PCIT vs Pro Interactive Service (India) Pvt. Ltd., which confirmed that such payments, if made before the filing of the return, should not attract disallowances.
This decision highlights the leniency the judicial system may exhibit towards procedural delays in statutory payments, provided they are completed before the tax filing deadline. It underscores the importance of understanding the specific timelines for tax-related contributions and the potential legal relief available.
The ITAT’s decision in ITA 1751/DEL/2021 sets a significant precedent for other companies facing similar issues, emphasizing the critical timing of tax payments relative to tax filing deadlines rather than the statutory due dates alone.
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