The Income Tax Appellate Tribunal Delhi Bench ‘G’ addressed an appeal filed by the Deputy Commissioner of Income Tax, Central Circle-19, New Delhi against Jaguar And Co. P.Ltd regarding the late deposit of Provident Fund (PF) and Employee State Insurance (ESI) contributions for the Assessment Year 2019-20. This case was presided over by Sh. N. K. Billaiya, Accountant Member, and Sh. Anubhav Sharma, Judicial Member.
The central issue of the appeal was the deletion of a disallowance of Rs.5,45,033/- made by the CPC, Bangalore on account of late payment of PF and ESI. The appellant contested the CIT(A)’s decision, which was initially based on a prima facie adjustment error identified by the CPC under section 143(1)(a)(ii) of the Income Tax Act, 1961.
The revenue’s grievance included several points of contention regarding the incorrect handling of the PF and ESI contributions. The main argument revolved around the alleged misinterpretation of section 36(1)(va) and related legal precedents that could potentially allow the deduction of these contributions post the due date under statutory provisions.
The Tribunal, after reviewing the case, highlighted the precedence set by the Supreme Court in Checkmate Services Private Limited which addressed similar issues. The Tribunal ruled in favor of the Revenue, emphasizing the correct interpretation of legal provisions concerning the timely deposit of employees’ contributions towards PF and ESI.
In their decision, the Tribunal allowed the appeal of the Revenue, reversing the order of the CIT(A) and reinstating the initial disallowance. This judgement was announced on January 9, 2023, and stresses the importance of adhering to statutory deadlines for depositing employee contributions to ensure compliance with the Income Tax Act.
This case serves as a significant precedent for future cases involving the late deposit of employee contributions, providing clear guidelines on how such issues are to be legally interpreted and handled by the authorities.
Final Tribunal Order on Delay in PF and ESI Deposit for Jaguar And Co. P.Ltd, Delhi (A.Y. 2019-20)
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