Tribunal restores PF/ESIC contributions under Section 36(1)(va) and 43B, allows Section 80JJA deduction despite late Form 10DA filing

The ITAT Delhi restored the matter to the Assessing Officer regarding employees' PF/ESIC contributions under Section 36(1)(va) read with Section 43B, directing examination of whether deposits were made within prescribed due dates following Kanoi Papers precedent. The tribunal allowed the assessee's appeal regarding Section 80JJA deduction denial, ruling that filing Form 10DA after the return but before intimation was acceptable based on Jeans Knit decision, finding the prescribed form requirement as directory rather than mandatory. For Section 80JJAA deduction eligibility, the matter was restored to CIT(A) for merit-based adjudication after proper opportunity to the assessee.

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Issues:
1. Challenge to disallowance of employees' contribution to PF/ESIC under Section 36(1)(va) r.w. Section 43B of the Act.
2. Disallowance of Rs. 35,10,013/- under Section 36(1)(va) for Assessment Year 2020-21.
3. (i) Disallowance of deduction of Rs. 50,28,534/- under Section 80JJA of the Act.
(ii) Disallowance of expenditure of Rs. 98,90,814/- under Section 2(24)(x) r.w. Section 36(1)(va) of the Act.
4. Denial of deduction of Rs. 50,28,534/- under Section 80JJA of the Act for Assessment Year 2018-19.

Issue 1:
The Appellate Tribunal found merit in the plea towards timely deposit of employees' contribution to PF/ESIC as per the due date prescribed under relevant legislations and regulations. The matter was remanded back to the Assessing Officer for fresh determination to ascertain any delay in depositing such contributions. The assessee was directed to provide all relevant facts for evaluation, and the Assessing Officer was instructed to pass a fresh order after due opportunity for the assessee to be heard.

Issue 2:
Similar contentions were raised for Assessment Year 2020-21 as in the previous appeal. The observations made for Assessment Year 2019-20 were held applicable, setting aside the CIT(A) order and remanding the matter to the Assessing Officer for fresh determination in line with the earlier decision.

Issue 3:
For the first issue concerning denial of deduction under Section 80JJA due to belated filing of Form 10DA, the Appellate Tribunal held that the denial solely for this reason was not justified. The Assessing Officer was directed to grant the deduction as claimed. As for the second issue on the disallowance of expenditure, the matter was also remanded back to the Assessing Officer for fresh determination following the principles outlined in a previous case.

Issue 4:
The denial of deduction under Section 80JJA for Assessment Year 2018-19 was contested in the regular assessment proceedings. The Tribunal held that the denial in the regular assessment was not justified, similar to the decision made for the preceding year. The matter was further referred back to the CIT(A) for a thorough examination of the eligibility of the deduction under Section 80JJAA on merits, allowing the assessee to present its case and the CIT(A) to adjudicate accordingly.

In conclusion, the appeals of the assessee were allowed for statistical purposes in all the cases, with specific directions given for fresh determinations and assessments in line with the legal principles discussed for each issue.

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