ORACLE CERNER HEALTHCARE SOLUTIONS INDIA PRIVATE LIMITED,BENGALURU vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(1), BANGALORE, BANGALORE

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ITA 1455/BANG/2025Status: DisposedITAT Bangalore16 July 2026AY 2022-235 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the delay was due to reasons beyond the assessee's control and was sufficiently explained. Therefore, the disallowance under Section 36(1)(va) was not sustainable.

What were the facts?

The assessee paid employees' contribution to PF one day late due to a technical glitch in the EPFO portal. The CPC disallowed this contribution, and the CIT(A) confirmed the disallowance.

What were the issues?

Whether a one-day delay in depositing employees' PF contribution due to technical glitches in the EPFO portal warrants disallowance of the deduction.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH : BANGALORE

Before: SHRI BALAKRISHNAN S & SHRI KESHAV DUBEY

For Appellant: Shri. G. C. Srivastava, Advocate
For Respondent: Shri. Pradeep S, Addl. CIT(DR)(ITAT), Bengaluru
Hearing: 02.07.2026Pronounced: 16.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH : BANGALORE BEFORE SHRI BALAKRISHNAN S, ACCOUNTANT MEMBER AND SHRI KESHAV DUBEY, JUDICIAL MEMBER ITA No.1455/Bang/2025 Assessment Year : 2022-23 M/s. Oracle Cerner Healthcare Solutions Vs. DC/ACIT, India Pvt. Ltd., Circle – 5(1)(1), Ground Floor, Wing B, Block H2, Mountain Bangalore. Ash, Manyata Embassy Business Park, Nagawara, Venkateshapura S.O. Outer Ring Road, Bangalore North, Bangalore – 560 045. PAN : AAFCC 8750 R APPELLANT RESPONDENT Assessee by : Shri. G. C. Srivastava, Advocate Revenue by : Shri. Pradeep S, Addl. CIT(DR)(ITAT), Bengaluru. Date of hearing : 02.07.2026 Date of Pronouncement : 16.07.2026 O R D E R Per Balakrishnan S, Accountant Member : This appeal filed by the assessee against the order of learned Addl./JCIT (A)-1, Mumbai, vide DIN and Order No.ITBA/APL/S/250/2025- 26/1075669579(1) dated 17.04.2025, for the Assessment Year 2022-23 arising out of the Order passed under section 143(1) of the Act, dated 07.06.2023.

2.

Briefly stated facts of the case are assessee filed its return of income on 29.11.2022 declaring a total income of Rs.70,82,26,880/- under normal

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provisions of the Act and book profits of Rs.1,62,82,23,751/- under provisions of section 115JB of the Act. During the relevant Assessment Year, assessee has paid total employees’ contribution to PF aggregating to Rs.34,51,78,881/-. The CPC while processing the return of income, observed that the assessee has paid the employees’ contribution to PF for the month of May, 2021 which was due on 15.06.2021, was belatedly paid on 16.06.2021.

3.

On being aggrieved by the addition made by the learned CPC, assessee carried the matter before the learned CIT(A). The learned CIT(A) confirmed the additions made by the CPC by relying on the decision in Checkmate Services Pvt. Ltd, by the Hon’ble Apex Court.

4.

On being aggrieved by the order of the learned CIT(A), the assessee is in appeal before us by raising various grounds. The only issue raised by the assessee is with respect to disallowance of employees’ contribution to PF paid belatedly by one day amounting to Rs.2,64,34,070/-. The learned AR submitted that there was a technical glitch in the portal of EPFO and hence there is delay of one day in making the payment of employees’ contribution to PF for the month of May 2021. He also further submitted that the assessee is regular in depositing the dues without any delay. He also referred to the Paper Book Page Nos.381 to 383 wherein the screenshot of the EPFO portal is furnished, which indicates that there was a technical glitch in processing the payment made by the assessee. Further, he also relied on the decision of the Co-ordinate Bench in the case of Dusters Total Solutions (P.) Ltd., Vs. DCIT in ITA Nos.652, 653, 980/Bang/2025. He

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therefore prayed that delay is not deliberate by the assessee but due to technical glitches in the PF and EPFO portals and therefore the disallowance is not justified.

5.

Per contra, the learned DR relied on the order of Revenue authorities.

6.

We have heard both the sides and perused the material available on record. On going through the Paper Book submitted by the assessee, the screenshot furnished by the assessee with respect to the EPFO website shows as “page is unresponsive”. The assessee has also highlighted the non-availability of portal to the Regional PF Commissioner, Bangalore. In the case relied on by the assessee in the case of Dusters Total Solutions (P.) Ltd., (supra), the Co-ordinate Bench, Bangalore in paras 28.1 to 28.4 held as follows:

“28.1 We find that the assessee has demonstrated that a major portion of the delay was due to reasons that were completely beyond its control. The PF and ESI portals were experiencing ongoing technical problems during the relevant period. These problems were not limited to the assessee but affected employers across the country. The assessee attempted to deposit contributions within time, but the system did not allow the completion of payments. Once the technical issues were resolved, the assessee deposited the dues immediately, usually within one or two days. These facts show that the delay was not deliberate or intentional. 28.2 We also note that the year 2017 witnessed the nationwide implementation of the Aadhaar-UAN linkage requirement. Several employees of the assessee had mismatches in their Aadhaar details, including name, father's name and date of birth. Such mismatches prevented the deposit of PF until the records were corrected. These corrections could be done only by EPFO officers after joint requests

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from both employer and employee. The assessee has filed evidence that the parent company had repeatedly approached EPFO, and EPFO itself acknowledged operational issues. Therefore, we hold that the delays arising from Aadhaar-UAN linking were genuine and unavoidable. 28.3 It is a well-settled principle of law that the law does not compel a person to do the impossible. This principle has been affirmed by the Hon'ble Supreme Court in several decisions. When a statutory obligation cannot be completed due to reasons outside the assessee's control, the delay must be treated as a reasonable cause. In the present case, the assessee has clearly shown that the delay was due to portal failures, technical glitches, and statutory system-driven obstacles. These constitute valid circumstances beyond the assessee's control. 28.4 We therefore hold that the delay in deposit of PF/ESI contribution is sufficiently explained and satisfactorily justified. Once a reasonable cause is established, a disallowance cannot be sustained merely because the deposit crossed the statutory due date. The objective of the law is to ensure that the contributions are ultimately paid. In this case, the entire amount has been deposited. The Government has suffered no loss, and the employees' interests have been fully protected. Hence, the substantive compliance has been achieved.”

7.

In the instant case, assessee was prevented by the circumstances beyond the control of the assessee while making the deposit of employees’ contribution to PF through the EPFO portal. The assessee has clearly demonstrated that the delay was due to the reasons that were beyond its control as EPFO portal was experiencing technical issues. We, therefore, hold that the delay in depositing of employees’ contribution to PF is sufficiently explained with a reasonable cause and therefore the disallowance under section 36(1)(va) of the Act cannot be sustained merely because of one day delay in depositing the same. We, therefore, direct the

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learned AO to allow the deduction under section 36(1)(va) of the Act. Thus, the grounds raised by the assessee are allowed.

8.

In the result, the appeal is allowed.

Pronounced in the open court on the date mentioned on the caption page.

Sd/- Sd/- (KESHAV DUBEY) (BALAKRISHNAN S) Judicial Member Accountant Member Bangalore. Dated: 16.07.2026. /NS/*

Copy to: 1. Appellants 2. Respondent 3. CIT 4. CIT(A) 5. DR 6. Guard file By order

Assistant Registrar, ITAT, Bangalore.

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