The Income Tax Appellate Tribunal Delhi’s G Bench, under Judicial Member Sh. Kul Bharat and Accountant Member Sh. Anil Chaturvedi, deliberated on the case of Manage Air Products India Pvt. Ltd., which contested adjustments made due to delayed PF/ESI contributions for the assessment year 2019-20.
Manage Air Products India Private Limited, a New Delhi-based company, faced an assessment by the CPC, which led to a disallowance concerning the delay in depositing employee contributions to Provident Fund (PF) and Employee State Insurance (ESI).
The case, filed under ITA No. 1609/DEL/2021, saw various arguments presented by both sides. The core of the dispute revolved around the timely deposit of employee contributions to PF and ESI, critical for compliance under the Income Tax Act, 1961.
The tribunal referenced multiple precedents, including the Delhi High Court’s stance in similar cases, which favor the assessee if contributions are deposited before the filing of the return. The tribunal also discussed the implications of the Finance Act 2021 amendment but concluded it was not applicable for the year in question.
After reviewing the submissions and precedents, the tribunal ruled in favor of Manage Air Products India, allowing the appeal and setting aside the disallowance made by the lower authorities. This decision reinforces the importance of compliance timelines while acknowledging the nuances in procedural lapses.
This case highlights the ongoing issues surrounding the management of PF and ESI contributions within the framework of Indian tax law, providing significant insights for businesses on managing employee contributions to avoid legal pitfalls.
Order pronounced in the open court on 26th April 2022.
Manage Air Products India vs Circle-16(2), Delhi: Dispute Over Delayed PF/ESI Contributions
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