Case Law Details
Radial International Vs DCIT (ITAT Delhi)
Introduction: The case of “Radial International vs DCIT” was heard by the ITAT Delhi and revolves around the disallowance of payment of Provident Fund (PF) amounting to Rs.89,644/- deposited after the due date. The central issue is whether the payment made on the next working day, when the due date falls on a national holiday, should be accepted and not subject to disallowance under section 36(1)(va) of the Income-tax Act, 1961.
Analysis: In this case, the assessee appealed against the order of the AO/CPC disallowing the PF payment due to its deposit after the due date. The ld. CIT (A) upheld the disallowance, citing a Supreme Court order and referring to the case of M/s. Checkmate Services Pvt. Ltd. The appellant presented the argument that the PF payment was deposited on the next working day as the last due date was a national holiday. This argument was supported by a similar ITAT order in a previous case.
The ITAT analyzed the situation and agreed with the appellant’s submissions. It noted that if the last due date for depositing payment falls on a holiday and the payment is made on the next working day, it should be allowed. The ITAT referred to the provisions of the General Clauses Act, 1897, and decided to remit the issue back to the AO for re-examination. The ITAT’s decision aligned with their earlier order in a similar case, indicating consistency in their approach.
Conclusion: The ITAT Delhi’s decision in the “Radial International vs DCIT” case demonstrates the importance of considering the specific circumstances when assessing disallowances. The ITAT’s directive for re-examination reflects the need to account for factors like holidays affecting payment due dates. This case emphasizes the principle of fairness in taxation by allowing payments made on the next working day after a holiday and encourages a consistent approach in line with previous decisions.
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