9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (3) TMI 37 - AT - Income TaxAddition on account of late deposit of ESI and EPF contribution from the employees - Payments payments were made by the assessee before filing of the due date of filing the return of income - HELD THAT - It is undisputed fact that the payments were made beyond due date of specified time mentioned in the Provident Fund Act. It is also admitted fact that the payments were made by the assessee before filing of the due date of filing the return of income. On this aspect, the coordinate Bench of ITAT, Visakhapatnam 2021 (9) TMI 1350 - ITAT VISAKHAPATNAM under similar set of facts decided the issue in favour of the assessee, relying on the decision of Hon ble Karnataka High Court in the case of Essae Teraoka (P) Ltd. 2014 (3) TMI 386 - KARNATAKA HIGH COURT - Decided in favour of assessee.
Issues Involved:
Disallowance of deduction under section 36(1)(va) for late payment of employees' contribution to EPF and ESIC. Detailed Analysis: 1. Background: The appeal is filed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2017-18 regarding the disallowance of deduction under section 36(1)(va) due to late payment of employees' contribution to EPF and ESIC. 2. AO's Disallowance: The Assessing Officer disallowed the deduction of ?8,27,062 under section 36(1)(va) as the employees' contributions to EPF and ESIC were paid after the due dates specified in the Acts, relying on CBDT Circular No.22 of 2015. 3. CIT(A)'s Decision: The Commissioner of Income Tax (Appeals) upheld the AO's disallowance, leading the assessee to file an appeal before the ITAT. 4. Assessee's Grounds: The assessee challenged the disallowance, arguing that the payments were made before the due date of filing the return of income under section 139(1) of the Income Tax Act, 1961. They cited various High Court decisions in support of their claim. 5. ITAT's Analysis: After hearing both parties, the ITAT observed that the payments were made after the due dates specified in the Acts but before the due date of filing the return of income. The ITAT referred to decisions of various High Courts and the Supreme Court supporting the assessee's position. 6. Legal Precedents: The ITAT considered decisions such as Essae Teraoka (P) Ltd. Vs. DCIT, Tetra Soft (India) Pvt. Ltd. Vs. ACIT, and CIT Vs. Udaipur Dugdh Utpadak Sahakari Sangh Ltd., among others, which supported allowing deductions for payments made before the due date of filing the return. 7. ITAT's Decision: Citing the principle that a construction favoring the assessee should be adopted when interpreting taxing provisions, the ITAT allowed the appeal, deleting the disallowance of late deposit of employees' contribution to PF and ESI. The ITAT followed its previous decision in a similar case, where the appeal of the assessee was allowed. 8. Conclusion: The ITAT pronounced the order in favor of the assessee, allowing the appeal and deleting the disallowance of the deduction. The decision was based on the interpretation of relevant legal provisions and supporting judicial precedents. This detailed analysis outlines the issues involved, the arguments presented by both parties, the legal precedents considered, and the final decision of the ITAT in favor of the assessee.
|
