In the case of Computer Clinic India Pvt. Ltd. versus the Income Tax Officer, Ward-6(2), New Delhi, the primary issue involves the disallowance of employee contributions to Provident Fund (PF) and Employee State Insurance (ESI) under sections 36(1)(va) and 2(24)(x) of the Income Tax Act for the assessment year 2019-20.
Computer Clinic India Pvt. Ltd., located at 301-A, Sagar Complex, New Rajdhani Enclave, Vikas Marg, New Delhi, contested the disallowance of employee contributions to PF and ESI that were deposited beyond the due date but before the filing of the income tax return. The Assessing Officer (AO) disallowed these contributions, leading to a significant increase in the taxable income.
The tribunal, led by Judicial Member Kul Bharat, addressed the appeal filed by Computer Clinic India Pvt. Ltd. The tribunal considered the conflicting judgments from various High Courts and the specific details of the case. Ultimately, the tribunal ruled in favor of the appellant, Computer Clinic India Pvt. Ltd.
The tribunal discussed several key issues:
The tribunal’s decision underscores the importance of understanding the legislative intent and the distinction between employer and employee contributions. By allowing the appeal, the tribunal reinforced the position that employee contributions deposited before the return filing due date should not be disallowed, despite being deposited after the statutory due date.
Order pronounced in the open court on 22nd February, 2022.
KUL BHARAT
Judicial Member
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