Case Number: ITA No.1404/DEL/2021
Assessment Year: 2019-2020
Date of Order: 2022-04-26
Rajnish Gandhi from New Delhi filed an appeal against the ADIT CPC Bengaluru concerning additional taxes imposed due to the alleged delayed deposits of Provident Fund (PF) and Employee State Insurance (ESI) contributions.
During the fiscal year, discrepancies related to the timing of PF and ESI contributions led to additional taxes. The appellant contended that all contributions were made before the filing of the income tax return, although the deposits were recorded after their due dates due to technical delays.
The appellant’s lawyer argued that the Finance Act of 2021, which amended relevant sections of the Income Tax Act, did not apply retrospectively and thus should not impact the current case. They cited similar historical cases where the judiciary ruled in favor of the assessee when all dues were cleared before the tax filing.
The tribunal, referencing decisions from higher judicial authorities including the Delhi High Court and the Supreme Court, ruled that the provisions for penalizing delayed PF/ESI payments could not apply as the payments were completed before the income tax returns were filed. Consequently, the appeal was allowed, reversing the tax authority’s decision.
This case highlights the importance of understanding legislative changes and their applicational timing in tax disputes. It serves as a significant precedent for similar cases involving discrepancies in the timing of statutory contributions.
Rajnish Gandhi vs ADIT CPC Bengaluru: Appeal on Delayed PF/ESI Deposits for AY 2019-2020
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