2021 (10) TMI 514 - AT - Income Tax

ITAT rules in favor of assessee on delayed payments, citing Delhi HC decisions

M/s. Express Roadway P. Ltd. Versus ACIT Circle – 8 (2) New Delhi

M/s. Express Roadway P. Ltd. Versus ACIT Circle – 8 (2) New Delhi - TMI Issues involved:1. Disallowance of deduction on account of employees' contribution to PF under sections 36(1)(va) and 43B of the IT Act.Detailed Analysis:Issue 1: Disallowance of deduction on account of employees' contribution to PF under section 36(1)(va) of the IT Act:The assessee, a company engaged in transportation and providing warehouse facilities, filed its return for A.Y. 2013-14. The AO disallowed deductions for delayed payments of employee contributions to PF & ESI, citing the Kerala High Court decision in CIT vs. Merchem Ltd. The CIT(A) upheld the disallowance. The assessee contended that all sums were deposited before the return filing date, relying on the Delhi High Court's decision in CIT vs. AIMIL Ltd. The ITAT noted that the Delhi High Court held that if the actual payment is made before filing the return, the assessee can get the benefit. Additionally, the ITAT referred to the Delhi High Court's decision in SPL Industries vs. CIT, emphasizing the distinction between employer and employee contributions. The ITAT found no fallacy in the CIT(A)'s decision, and as the Revenue failed to provide contrary binding decisions, the ITAT allowed the assessee's appeal.Conclusion:The ITAT allowed the appeal, emphasizing that the delayed payments were made before the return filing date, in line with the principles laid down by the Delhi High Court decisions. The ITAT found no grounds to interfere with the CIT(A)'s order, ultimately ruling in favor of the assessee.