Assessee wins appeal, INR 17,17,650 disallowance deleted under Income Tax Act

The Tribunal ruled in favor of the assessee, directing the Assessing Officer to delete the disallowance of INR 17,17,650 for delayed payment of employee's provident fund contribution under section 36(1)(va) of the Income Tax Act. The Tribunal found that the payment was made before the due date of filing the income tax return, in line with judicial precedents, and noted that recent amendments applied from the assessment year 2021-22 onwards. The second ground raised by the assessee was dismissed as not pressed, resulting in a partial allowance of the appeal pronounced on 26.04.2022.

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Issues:
1. Disallowance towards delayed payment of employee's contribution to provident fund under section 36(1)(va) of the Income Tax Act, 1961.
2. Addition made by the Assistant Director of Income Tax, CPC outside the scope of provisions of section 143(1) of the Act.

Issue 1: Disallowance towards delayed payment of employee's contribution to provident fund under section 36(1)(va) of the Income Tax Act, 1961:

The appeal challenged the impugned order that disallowed INR 17,17,650 for delayed payment of employee's provident fund contribution. The assessee contended that the payment was made before the due date of filing the income tax return. The Commissioner of Income Tax (Appeals) upheld the disallowance, citing recent amendments and decisions from the Madras and Gujarat High Courts. The assessee argued that the delayed payment was within the due date of filing the return of income. The counsel referred to judicial precedents and highlighted that the amendments by the Finance Act, 2021, apply from the assessment year 2021-22 onwards. The Tribunal noted that the payment was made before the due date of filing the return of income, and following judicial precedents, directed the Assessing Officer to delete the disallowance under section 36(1)(va) of the Act.

Issue 2: Addition made by the Assistant Director of Income Tax, CPC outside the scope of provisions of section 143(1) of the Act:

The second ground raised by the assessee was not pressed during the hearing and was dismissed as not pressed. Consequently, the appeal was partly allowed by the Tribunal. The decision was pronounced in open court on 26.04.2022.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved, the arguments presented by the parties, the legal precedents cited, and the final decision rendered by the Tribunal.

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