Case Number: ITA 1300/DEL/2021
Appellant: Trim India Private Limited, Gurgaon
Respondent: Assistant Director of Income Tax, Bangalore
Assessment Year: 2019-2020
Case Filed On: 2021-10-04
Order Type: Final Tribunal Order
Date of Order: 2022-08-29
Pronounced On: 2022-08-29
Trim India Pvt Ltd filed an appeal against the order of the CIT(A), National Faceless Appeal Centre, New Delhi, which upheld the disallowance made by the Assessing Officer regarding the late deposition of employees’ contributions to EPF and ESI. The disallowance pertained to contributions made after the due dates prescribed by the relevant acts but before the statutory due date for filing the income tax return.
The primary issue was whether the late deposited amounts should be allowed as deductions under the Income Tax Act. The Tribunal considered the jurisprudence set by the Delhi High Court in the case of CIT Vs. AIMIL Ltd, which allows for such deductions if the payments are made before the filing of the income tax return, despite being late as per the EPF and ESI Acts’ timelines. The Tribunal also examined amendments made by the Finance Act, 2021, affirming that the provisions should apply prospectively and not affect the assessee’s case for the year in question.
The Tribunal ruled in favor of the assessee, directing the Assessing Officer to delete the impugned addition, thereby allowing the appeal. This decision reaffirms the position that late payments of employee contributions to EPF and ESI, if made before the due date of filing the tax return, should not attract penalties under the Income Tax Act, aligning with earlier judicial precedents and legislative intent.
Order pronounced in the open court on 29/08/2022.
Judicial Member: Astha Chandra
Accountant Member: N.K. Billaiya
Order Dated: 29/08/2022
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