SURESH DHARNIA,JAIPUR vs. INCOME TAX OFFICER, JAIPUR

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ITA 235/VIZ/2025Status: DisposedITAT Visakhapatnam18 July 2025AY 2020-21Bench: us : “1. That the disallowance of amount made under Section 36(1)(va) is erroneous and bad in law. The learned AO and CIT(A) failed to appreciate that the contributions to EPF/ESI were deposited before the due date for filing the return of income under Section 139(1), and there was no intention to withhold or misuse such funds. 2. That the bona fide intent of the appellant and practical difficulties should have been considered. The disallowance of amount made does not align with the princip1 pages

AI SummaryDismissed

Facts

The assessee filed appeals against orders disallowing the claim for deduction of delayed deposit of employee's share of contribution towards EPF/ESI. The disallowance was made under Section 36(1)(va) for delayed payments beyond the prescribed due dates. The assessee contended that the payments were made before the due date for filing the return of income, and the amendment by the Finance Act, 2021, was not applicable.

Held

The Tribunal held that the employee's contribution to PF/ESI must be deposited within the prescribed due dates under the relevant Acts to be allowed as a deduction under Section 36(1)(va). The amendment by the Finance Act, 2021, is clarificatory and retrospective. The Supreme Court's decision in Checkmate Services Pvt. Ltd. was also cited, reinforcing this view.

Key Issues

Whether the delayed deposit of employee's contribution towards EPF/ESI beyond the statutory due dates is eligible for deduction under Section 36(1)(va) of the Income Tax Act, 1961.

Sections Cited

36(1)(va), 139(1), 143(1)(a)(iv), 43B, 2(24)(x)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Visakhapatnam Bench

For Appellant: Dr. Aparna Villuri, Sr.AR

आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Suresh Dharnia, Door No.6-14/1, Shivalayam Street, Vepagunta Ward – 69, Visakhapatnam (Urban) - 530047 2. रधजस्व/ The Revenue : The Income Tax Officer, Visakhapatnam 3. The Principal Commissioner of Income Tax, Visakhapatnam. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण / DR, ITAT, Visakhapatnam 5. गधर्ाफ़धईल / Guard file

आदेशधिुसधर / BY ORDER

Sr. Private Secretary ITAT, Visakhapatnam