This case revolves around the assessment year 2019-20, where Excel Phosphates Private Limited, a manufacturer of pesticides and fertilizers based in Meerut, challenged the adjustments made by the CPC for delayed deposits of employee contributions to provident fund and ESI.
The company filed its tax return declaring a gross income of Rs. 33,92,801. During processing, the CPC made an adjustment of Rs. 2,84,286 for delayed contributions, which the company contended was unjustified.
The company’s main argument was that these payments were made before the due date of income tax return filing, hence should be allowable as per past High Court judgments. However, the CPC and subsequent appeal confirmed the adjustments, citing recent amendments to tax laws which deem such late payments as non-deductible.
The Tribunal examined various precedents, including decisions by the Delhi High Court which supported the assessee’s position. The tribunal’s decision, influenced by these precedents, ultimately favored the assessee, directing the CPC to reverse the adjustments.
This decision highlights the ongoing conflicts between statutory deadlines for welfare contributions and their recognition for tax purposes. The outcome provides significant relief to businesses grappling with similar issues and underscores the evolving nature of tax jurisprudence concerning employee benefits.
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