NCLAT: Consideration of Debt Restructuring by Lenders Doesn’t Bar Member from Initiating Proceedings  ||  Delhi High Court: In Matters of Medical Evaluation, Courts Should Exercise Restraint  ||  Delhi HC: Any Person in India Has Right to Legally Import Goods from Abroad and Sell the Same  ||  Delhi HC: Waiver to Section 12(5) of Arbitration Act to be Given Once Tribunal is Constituted  ||  Supreme Court Has Asked States to Regularise Existing Court Managers  ||  SC: Union & States to Create Special POSCO Courts on Top Priority  ||  SC Upholds Authority of CERC to Award Compensation for Delays  ||  SC: Arbitral Tribunal Has Discretion to Include in Sum Awarded, Interest at Rate as it Deems Reasonab  ||  SC: Cannot Use Article 142 to Frame Guidelines on Judicial Recusal  ||  SC: Satisfaction Recorder in One EP Won’t Affect Subsequent EPs for Future Breaches    

Transact BPO Services India Pvt Ltd. Vs. Deputy Commissioner Of Income Tax - (Income Tax Appellate Tribunal) (14 Mar 2022)

Employees' contribution paid by the assessee before the due date of filing of return of income under Section 139(1) of the I.T. Act is an allowable deduction

MANU/IL/0201/2022

Direct Taxation

The assessee has filed present appeal challenging the order passed by Learned CIT(A), National Faceless Appeal Centre, Delhi and it relates to the assessment year 2019-20. The only issue urged in present appeal relates to disallowance of Rs.4,07,792, being employees contribution to provident fund and employees state insurance, under Section 36(1)(va) of the Income-tax Act,1961 (IT Act)

On identical facts, the Bangalore Bench of the Tribunal in the case of Shakuntala Agarbathi Company Vs. DCIT by following the dictum laid down by the High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT¸ had held that the assessee would be entitled to deduction of employees' contribution to PF and ESI provided that the payments were made prior to the due date of filing of the return of income under Section 139(1) of the I.T. Act. It was further held by the ITAT that, amendment by Finance Act, 2021, to Section 36[1][va] and 43B of the Act is not clarificatory.

The amended provisions of Section 43B as well as 36(1)(va) of the I.T. Act are not applicable for the assessment year under consideration. By following the binding decision of the High Court in the case of Essae Teraoka Pvt. Ltd Vs. DCIT, the employees' contribution paid by the assessee before the due date of filing of return of income under Section 139(1) of the I.T. Act is an allowable deduction. The disallowance made by the Assessing Officer is deleted. The appeal filed by the assessee is allowed.

Tags : ASSESSMENT   DEDUCTION   DISALLOWANCE  

Share :        

Disclaimer | Copyright 2025 - All Rights Reserved