This case involves appellant Rishi Bansal of Ballabgarh, Haryana, challenging the Income Tax Appellate Tribunal’s (ITAT) decision relating to the disallowance of delayed Employees’ Provident Fund (EPF) and Employee State Insurance (ESI) payments for the assessment year 2019-20.
Rishi Bansal faced disallowances by the Commissioner of Income Tax Appeals (CITA) over alleged delays in depositing employees’ contributions to EPF and ESI. The primary legal contention revolves around whether these delayed payments justify disallowances under the Income Tax Act, with significant implications for the appellant’s tax liabilities.
The ITAT panel, comprising Judicial Member Shri Kul Bharat and Accountant Member Shri Pradip Kumar Kedia, considered multiple similar cases, with ITA No.1079/Del/2021 serving as the lead case. The tribunal found substantial ground in the appellant’s arguments that align with precedents set by higher courts, which have ruled against the revenue in similar circumstances.
Significantly, the tribunal referenced the legislative amendments introduced by the Finance Act 2021, clarifying that the provisions of Section 43B of the Income Tax Act do not apply to cases like this, ensuring that no such disallowance should be made if the employee contributions are deposited before the filing of the return of income.
The tribunal’s decision in May 2022 upheld the appeal, allowing the deductions claimed by Rishi Bansal and setting a precedent for similar cases. This outcome highlights the judiciary’s stance on ensuring fair treatment for taxpayers facing procedural discrepancies in depositing employee contributions.
The detailed judgment underscores the importance of adhering to statutory timelines while providing relief to those who rectify their procedural lapses within a reasonable period.
Rishi Bansal vs ACIT, Circle 2(1), Faridabad: A Dispute Over Delayed EPF and ESI Payments
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