Case Number: ITA 1223/DEL/2021
Appellant: Vamani Overseas Pvt. Ltd., New Delhi
Respondent: DCIT, CPC, Bengaluru
Assessment Year: 2018-19
Case Filed on: 2021-09-27
Order Type: Final Tribunal Order
Date of Order: 2022-02-28
Pronounced on: 2022-02-28
In the case of Vamani Overseas Pvt. Ltd. vs. Deputy Commissioner of Income Tax, CPC, Bengaluru, the appellant challenged the disallowance of employee contributions towards ESI and PF under Section 36(1)(va) of the Income Tax Act, 1961, for the assessment year 2018-19. The disallowance was made by the CPC, Bengaluru, on the grounds that the contributions were deposited after the due dates specified under the respective Acts, but before the due date for filing the income tax return under Section 139(1).
Vamani Overseas Pvt. Ltd. raised several grounds of appeal, contending that the disallowances were unwarranted as the contributions were made before the due date for filing the income tax return under Section 139(1). The appellant argued that:
The case was heard by the Delhi Bench ‘G’ of the Income Tax Appellate Tribunal, presided over by Shri Saktijit Dey, Judicial Member, and Dr. B. R. R. Kumar, Accountant Member. The Tribunal noted that the appellant had deposited the employee contributions to PF and ESI before the due date for filing the return under Section 139(1) of the Act, although the payments were made after the due dates specified in the relevant Acts.
The Tribunal relied on several judicial precedents to support the appellant’s position, including:
The Tribunal emphasized that the amendments made to Sections 36(1)(va) and 43B by the Finance Act 2021 should be construed as prospective, applicable from 01.04.2021, and not retrospectively. Since the contributions were deposited before the due date for filing the return, the Tribunal ruled that the disallowances were not justified.
The Tribunal concluded that the CIT(A) was not justified in sustaining the disallowance made by the CPC. Therefore, the appeal of Vamani Overseas Pvt. Ltd. was allowed, and the Assessing Officer was directed to delete the disallowance.
Order pronounced in the open court on 28/02/2022.
Signed by:
(Saktijit Dey)
Judicial Member
Signed by:
(Dr. B. R. R. Kumar)
Accountant Member
Vamani Overseas Pvt. Ltd. vs. DCIT, CPC: Appeal Against Employee Contribution Disallowance
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