Case Number: ITA 1591/DEL/2020
Appellant: Trans India Holidays Private Limited, New Delhi
Respondent: DCIT CPC, Bangalore
Assessment Year: 2018-19
Case Filed On: 2020-09-15
Order Type: Final Tribunal Order
Date of Order: 2022-01-31
Pronounced On: 2022-01-31
Trans India Holidays Private Limited filed an appeal against the disallowance made by the Deputy Commissioner of Income Tax (DCIT) Central Processing Centre (CPC) Bangalore under Section 36(1)(va) of the Income Tax Act, 1961. The disallowance pertained to the delayed deposit of employees’ contributions to Provident Fund (PF) and Employee State Insurance (ESI) for the assessment year 2018-19.
The appellant raised the following grounds of appeal:
The case was heard by Shri Kul Bharat, Judicial Member of the Income Tax Appellate Tribunal (ITAT) Delhi Bench “SMC-3” on 18.01.2022. The order was pronounced on 31.01.2022.
The learned counsel for the appellant, Shri Ankur Aggarwal, argued that the issue was covered in favor of the assessee by the judgments of the Delhi High Court in the cases of ITO Vs. AIMIL Ltd. and M/s Pro Interactive Services (India) Pvt. Ltd. The Senior Departmental Representative (DR), Sh. Om Prakash, supported the orders of the lower authorities but could not refute the fact that the issue was covered by the judgments cited by the appellant’s counsel.
After hearing the submissions and perusing the material on record, the Tribunal found that the issue was indeed covered in favor of the assessee by the judgment of the Delhi High Court in the case of M/s Pro Interactive Services (India) Pvt. Ltd. and other similar cases. Therefore, the Tribunal directed the Assessing Officer to delete the disallowance of Rs. 636,005 made under Section 36(1)(va) of the Income Tax Act.
The appeal of the assessee was allowed.
This case highlights the importance of timely compliance with statutory provisions related to employees’ contributions to PF and ESI. However, it also underscores the significance of judicial precedents in providing relief to taxpayers in cases of genuine delays caused by technical issues. The judgment reinforces the principle that as long as the contributions are deposited before the filing of the return, the assessee is entitled to relief, in line with the judgments of the higher judiciary.
Overall, this case serves as a reminder for taxpayers to be diligent in their compliance while also being aware of their rights and the legal remedies available to them in case of genuine hardships.
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