Case Number: ITA 1761/DEL/2020
Appellant: Surendra Kumar Thakur, New Delhi
Respondent: DCIT CPC, Bangalore
Assessment Year: 2018-19
Case Filed On: 2020-10-23
Order Type: Final Tribunal Order
Date of Order: 2021-11-11
Pronounced On: 2021-11-11
This appeal, numbered ITA 1761/DEL/2020, was filed by Surendra Kumar Thakur against the order dated 14.08.2020 of the Commissioner of Income Tax (Appeals)-12, New Delhi, relating to the assessment year 2018-19. The appellant, an individual, contested the disallowance of employees’ contributions towards Provident Fund (PF) and Employees’ State Insurance Corporation (ESIC) by the DCIT CPC, Bangalore.
The case was heard by the Delhi Bench ‘SMC-1’ of the Income Tax Appellate Tribunal (ITAT) on October 28, 2021, with the order pronounced on November 11, 2021. The bench comprised Accountant Member Sh. Anil Chaturvedi.
The primary grounds of appeal were:
The appellant, represented by Shri Gurjeet Singh, C.A., and Shri Deepanshu Jain, Adv., argued that while there was a delay in the deposit of PF/ESIC contributions, all contributions were deposited with the appropriate authorities before the filing of the return of income. The appellant relied on various judicial decisions, including Azamgarh Steel & Power vs CPC and CIT vs. AIMIL Ltd., to support the claim that no disallowance is warranted if the contributions are deposited before the return filing date.
The respondent, represented by Ms. Sangeeta Yadav, Sr. D.R., supported the order of the lower authorities and cited the decision in Vedvan Consultants Pvt. Ltd. vs DCIT. The respondent also referred to the amendment brought by the Finance Act 2021, which clarifies that the provisions of Section 43B shall not apply to employees’ contributions.
After careful consideration of the rival submissions and materials on record, the tribunal observed that the appellant had deposited all PF/ESIC contributions before the filing of the return of income. The tribunal relied on various judicial decisions, including the Hon’ble Delhi High Court’s decision in AIMIL Ltd., which supports the allowance of such contributions if deposited before the return filing date. The tribunal also noted that the amendment brought by the Finance Act 2021 applies from the assessment year 2021-22 onwards and does not affect the present case.
In conclusion, the tribunal directed the AO to delete the addition of Rs. 25,89,600 made under section 36(1)(va) of the Act. The appeal was partly allowed, with the ground on the validity of the addition under section 143(1) rendered academic.
The tribunal’s order was pronounced in the open court on November 11, 2021, by Accountant Member Sh. Anil Chaturvedi.
Members:
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Surendra Kumar Thakur vs. DCIT CPC, Bangalore – 2018-19 – Disallowance of PF/ESIC Contributions
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