ITA No. 436/Del/2021, Assessment Year: 2018-19. The case between CXC Infotech Pvt Ltd and DCIT CPC Bangalore was brought before Shri N. K. Billaiya, Accountant Member, and Shri Anubhav Sharma, Judicial Member, focusing on the disallowances made under sections 36(1)(va) and 40(A)(7) of the Income Tax Act due to delayed contributions to EPF and ESI.
The tribunal examined the timeline of deposits and relevant legislative amendments. It highlighted that the contributions, though delayed according to the ESI and PF Acts, were made before the due date for filing returns under the Income Tax Act. This complies with the allowance conditions under section 43B of the Act.
The tribunal referenced multiple High Court decisions, including the landmark case of CIT Vs. AIMIL Ltd, to emphasize that the legislative intent of these provisions is to ensure compliance without overly penalizing the taxpayers for procedural delays, provided the substantive obligations are met in a timely manner.
The appeal was allowed in favor of the appellant, CXC Infotech Pvt Ltd, with the tribunal condoning the delay in filing the appeal due to the COVID-19 pandemic and ruling against the procedural disallowances made by the CPC Bangalore.
This case reaffirms the judiciary’s stance on balancing procedural compliance with fairness in tax assessments, particularly in the context of employee contributions to welfare funds.
CXC Infotech Pvt Ltd vs DCIT CPC Bangalore: Dispute Over Delayed EPF and ESI Contributions
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform