Income Tax Appellate Tribunal Judgement on ITA No.1467/Del/2022
Introduction
The Income Tax Appellate Tribunal, Delhi ‘SMC’ Bench, delivered a consequential judgement on 16th August 2022 concerning the appeal filed by S S Saib Constructions P.Ltd against the Assistant Commissioner of Income Tax, Circle-2(1), Faridabad for the assessment year 2019-20. This case, bearing ITA No.1467/Del/2022, serves as a significant precedent in the interpretation and application of income tax laws pertaining to the late deposit of employees’ contribution to PF & ESI.
Background of the Case
S S Saib Constructions P.Ltd, a company based in Delhi, engaged in the business of fabrication and civil construction, filed an appeal against the order of the Learned CIT(A), National Faceless Appeal Centre, New Delhi, which was dated 29th November 2021. The appeal challenged the addition of Rs.879,514/- as late deposit charges of Employee’s Provident Fund (EPF) and Employees’ State Insurance (ESI) assessed under Section 250 of the Income Tax Act, 1961.
The Grounds of Appeal
The appellant argued that the order from the Learned CIT(A) was erroneous in law and on facts. Among the grounds raised were the denial of the appellant’s liability on the assessed total income, thereby challenging the basis of tax, interest, or penalty imposition due to the late deposit of ESIC & EPF.
Proceedings and Decision
Despite the absence of the appellant or their representative during the hearing, the Tribunal proceeded to address the appeal. Significant reliance was placed on the judgement of the Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd., which held that the legislative intent was not to treat belated payments of EPF and ESI as deemed income of the employer.
Considering the precedential judgement, the Tribunal directed the Assessing Officer to delete the disallowance, thus allowing the grounds raised by the assessee. The final decision, favouring S S Saib Constructions P.Ltd, marked a pivotal moment in the interpretation of income tax provisions related to employees’ contributions to social security schemes.
Conclusion
The judgement of ITA No.1467/Del/2022 reflects a judicious application of legal precedents and interpretations of the Income Tax Act, 1961, in favor of the assessee. This case underscores the Tribunal’s role in safeguarding taxpayer rights while ensuring adherence to the statutory provisions.
Through this analysis, tax professionals and companies engaged in similar disputes can gain insights into the legal rationale, aiding them in navigating the complexities of income tax appeals concerning the late deposit of employee contributions to PF and ESI.
