Technical portal failure prevented timely provident fund deposit, so late-payment disallowance was deleted.

Delayed deposit of employee provident fund contribution was held not to attract disallowance where the assessee had taken the required steps within time but the EPFO portal and Aadhaar-seeding process prevented timely challan generation and return filing. The Tribunal treated the one-day delay as caused by technical failure beyond the assessee's control, supported by EPFO circulars extending compliance in similar hardship situations, and held that such delay should not be treated as employer default. The disallowance under section 36(1)(va) was deleted.

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Issues: Whether the disallowance made under section 36(1)(va) of the Income-tax Act, 1961 for delayed deposit of employee provident fund contribution, where the delay was caused by technical glitches on the EPFO portal and the contribution was deposited on the next day, was sustainable.

Analysis: The assessee had deposited the employee provident fund contribution only one day after the due date because the EPFO system would not permit generation of the challan and filing of the return owing to Aadhaar seeding and portal-related issues. The subsequent circulars of the EPFO also recognized the hardship and extended the compliance date, indicating that such delay, in the given circumstances, should not be treated as the employer's default. The Tribunal relied on the principle that where the assessee had taken the required steps within time but the delay occurred because of technical failure beyond the assessee's control, the assessee should not suffer a disallowance for delayed deposit.

Conclusion: The disallowance was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: Where employee contribution is delayed only because of technical or system-related failure beyond the assessee's control, and the delay is otherwise attributable to the portal or banking mechanism, disallowance for late deposit is not warranted.

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