ITAT rules in favor of assessee, orders deletion of disallowances for delayed deposits to PF & ESI.

The ITAT ruled in favor of the assessee, directing the deletion of disallowances for delayed deposits to both the provident fund and the Employees State Insurance scheme. The ITAT emphasized the significance of timely deposits and adherence to due dates in accordance with relevant laws and judicial interpretations.

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Issues:
1. Disallowance of delayed deposit of employees' contribution to provident fund.
2. Disallowance of delayed deposit of employees' contribution to Employees State Insurance scheme.
3. Ex parte appellate order without sufficient opportunity to the assessee.

Issue 1: Disallowance of delayed deposit of employees' contribution to provident fund

The appeal was filed against the disallowance of delayed deposit of employees' contribution to provident fund. The assessee contended that the sum had been deposited before the due date of filing the return of income, citing judicial precedents to support the claim. The Central Processing Unit disallowed the amount, leading to an appeal before the National Faceless Appeal Centre. The appellate order confirmed the disallowance, relying on a decision of the Gujarat High Court. The assessee argued that the decision disregarded the Bombay High Court's ruling in a similar case. The ITAT found that the contribution was deposited within the extended due date as per a letter from the Ministry of Labour and Employment, thus directing the deletion of the disallowance.

Issue 2: Disallowance of delayed deposit of employees' contribution to Employees State Insurance scheme

The appeal also contested the disallowance of delayed deposit of employees' contribution to the Employees State Insurance scheme. The ITAT noted that the contribution was made after the due date but before the filing of the return of income. Referring to a decision of the Bombay High Court, the ITAT held that if such payments are made before the due date of filing the return of income, they are not disallowable. The ITAT directed the assessing officer to delete the disallowance of the contribution to the Employees State Insurance scheme.

Issue 3: Ex parte appellate order without sufficient opportunity to the assessee

The assessee raised concerns about the ex parte nature of the appellate order, stating that it was passed without granting sufficient opportunity and in disregard of relevant judicial decisions. The ITAT acknowledged the discrepancy in following the decision of the Gujarat High Court instead of the jurisdictional Bombay High Court. The ITAT ruled in favor of the assessee, directing the deletion of both disallowances and allowing the appeal.

In conclusion, the ITAT ruled in favor of the assessee, directing the deletion of the disallowances of delayed deposits to both the provident fund and the Employees State Insurance scheme. The ITAT emphasized the importance of timely deposits and adherence to due dates as per relevant laws and judicial interpretations.

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