This document elaborates on the Income Tax Appellate Tribunal’s ruling concerning the appeal filed by Eros City Developers Private Limited against the Assistant Commissioner of Income Tax, Central Circle-1, Delhi, for the assessment year 2020-21.
The central issue in this appeal was the addition made by the tax authorities under Section 143(1) of the Income Tax Act, 1961, regarding the late payment of employees’ contributions to Provident Fund (PF) and Employee State Insurance (ESI). The contributions were made after the statutory deadline but before the due date of filing the tax return under Section 139(1).
The Tribunal noted that this matter has been settled by the Supreme Court in the case of Checkmate Services Pvt. Ltd., which established that employee contributions paid after the due date specified under relevant Acts must be added back to the income of the assessee. Following this precedent, the Tribunal found no error in the lower authority’s decision and upheld the addition.
The Tribunal’s decision emphasizes the importance of timely compliance with statutory dues related to employee contributions to PF and ESI. It highlights that even if these dues are paid before the tax return filing date, they must still meet the specific statutory deadlines to avoid adverse tax consequences. This ruling reinforces the principle that timely financial discipline is crucial in statutory compliance to prevent additional tax liabilities.
The detailed examination and judgment provide clarity on handling such issues, ensuring that similar future disputes may be guided by this precedent.
Eros City Developers Private Limited vs. ACIT, Central Circle-1, Delhi: Assessment Year 2020-21
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