Trio Security and Intelligence Private Limited vs. ITO, Ward-25(4), Delhi

Case Number: ITA 819/DEL/2022

Assessment Year: 2018-19

Judgment Date: 19th May 2022

Background: Trio Security and Intelligence Private Limited, the appellant, contested the decision made by the Income Tax Officer, Ward-25(4), Delhi, the respondent, concerning the assessment year 2018-19. The matter pertains to the disallowance of the employee’s contribution to PF/ESI due to delayed deposits, which was the common issue in several appeals consolidated for adjudication.

Final Judgment: The Income Tax Appellate Tribunal, Delhi Bench ‘G’, delivered the judgment in favor of the appellant, Trio Security and Intelligence Private Limited. The primary point of contention revolved around the disallowance of the employee’s contribution to PF/ESI due to delays in deposit as per the respective acts. The Tribunal noted that the issue had been addressed in various precedents, favoring the stance that if such contributions were deposited before the due filing date of the return of income, disallowance was not warranted.

The matter was further bolstered by referencing judicial pronouncements, including the decision in Azamgarh Steel & Power vs. CPC and the Hon’ble Delhi High Court’s judgment in PCIT vs Pro Interactive Service (India) Pvt.Ltd., which aligned with the appellant’s argument. The Tribunal underscored that the legislative intent was not to penalize with deemed income due to belated payments of EPF and ESI when such payments were eventually made before the return filing deadline.

The ruling also addressed a specific appeal concerning Canary Agro Chemicals Pvt.Ltd. for the assessment year 2019-20, stating that the issue of double disallowance due to delayed contribution had been rectified, further supporting the overall decision to allow the appeals of the assessees, including Trio Security and Intelligence Private Limited.

In conclusion, the Tribunal allowed the appeals filed by the respective assessees, emphasizing the importance of substance over procedural lapses, provided the contributions were eventually made before the due date of income return filing. This decision marks a significant consideration for similar cases of disallowance due to delayed contributions.

Order pronounced in the open court on 19.05.2022.

Trio Security and Intelligence Private Limited vs. ITO, Ward-25(4), Delhi