The case of ITA No. 1948/DEL/2022 involves Hawa Singh, an appellant, against the ITO, Ward-62(1), Delhi, concerning the assessment year 2019-20. The issue at stake is the disallowance of employee contributions to Provident Fund (PF) and Employee’s State Insurance (ESI) due to delays in depositing these amounts as mandated by the respective acts.
During the tribunal proceedings, it was argued that despite the delays, all contributions were deposited before the filing of the income tax return, making them eligible for deduction. The tribunal reviewed precedents and rulings, including a judgment from the Hon’ble Delhi High Court which has consistently held that if contributions are deposited before the tax return is filed, they should not be treated as taxable income of the employer. The tribunal followed this precedent, allowing the appeal and ruling in favor of Hawa Singh.
This decision highlights the importance of timely compliance with statutory provisions related to employee welfare contributions while also recognizing the practical aspects of business operations that may sometimes cause delays. The tribunal’s adherence to judicial precedents ensures consistency in the application of the law, providing clarity to other similar cases.
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