This article examines the ITAT Delhi’s handling of the appeal ITA 1656/DEL/2021, where Rahul Kapoor contested the disallowance of late deposits towards employees’ provident fund and ESI for the assessment year 2018-2019.
Rahul Kapoor, a resident of New Delhi, challenged the decision of the CIT(A), which confirmed the addition made by the AO on account of late deposit of employees’ contributions to provident fund and ESI.
The case was escalated to the ITAT after the CIT(A) upheld the Central Processing Centre’s adjustments for delayed EPF and ESI contributions, impacting the tax liabilities for the fiscal year.
The Tribunal considered the precedents and legislative intent, particularly focusing on ensuring expenditures are recognized when actually made. The decision was in favor of the assessee, directing the AO to delete the disallowance.
The case underscores the importance of timely compliance with statutory dues but also highlights the flexibility provided under the Income Tax Act for contributions made before the filing of returns. The decision is a significant reference for similar disputes in tax assessments related to employee benefits contributions.
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