Partial Appeal Success: Late Contributions Allowed as Deductions

The Tribunal partially allowed the appeal in ITA No.604/Del/2021, directing the NFAC to delete the disallowance of late deposit of provident fund and ESI contributions. The Tribunal considered relevant legal precedents and the recent amendment clarifying the applicability of Section 43B on belated payments, concluding that contributions made before the due date of filing the return are deductible. Consequently, the appeal in ITA No.605/Del/2021 was dismissed as it became unnecessary following the favorable decision in ITA No.604/Del/2021.

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Issues Involved:
Appeals against two separate orders of the National Faceless Appeal Centre (NFAC) dated 09.04.2021 for A.Y.2018-19 - One appeal under section 143(1) and the other under section 154 of the Act.

Comprehensive Analysis:

Issue 1: Appeal in ITA No.604/Del/2021
- The appellant challenged disallowances on account of late deposit of provident fund and ESI made by the CPC.
- NFAC upheld the disallowances citing a decision of the Hon'ble Gujarat High Court.
- Appellant relied on a decision by the Tribunal in a similar case favoring the assessee and other relevant cases.
- After considering the arguments, the Tribunal found that the PF and ESI were deposited before the due date of filing the return, following the decision of the Hon'ble Gujarat High Court and other precedents.
- The Tribunal referred to the amendment in Section 36(1)(va) and Section 43B brought by the Finance Act, 2021, clarifying the applicability of Section 43B on belated payment of employee's contribution.
- The Tribunal concluded that the employees' contribution paid before the due date of filing the return is an allowable deduction, deleting the disallowance made by the Assessing Officer.
- The appeal was partly allowed in favor of the assessee, directing the NFAC to delete the disallowance.

Issue 2: Appeal in ITA No.605/Del/2021
- Since the appeal in ITA No.604/Del/2021 was decided in favor of the assessee, the appeal in ITA No.605/Del/2021 became unnecessary.
- The decision was announced in the open court on 30.09.2021.

In conclusion, the Tribunal's detailed analysis and application of relevant legal precedents, along with the consideration of the recent amendment, resulted in the partial allowance of the appeal in ITA No.604/Del/2021, leading to the dismissal of the appeal in ITA No.605/Del/2021 due to its consequential nature.

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