FIL India Business & Research Services P. Ltd. Vs DC (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT) Delhi addressed the case of FIL India Business & Research Services Pvt. Ltd. concerning the delayed deposit of employees’ PF/ESIC contributions amounting to ₹1.71 crores. The Assessing Officer (AO) disallowed the amount under Section 36(1)(va) read with Section 2(24)(x) of the Income Tax Act, citing delays. Upon review, ITAT upheld a ₹1.71 lakh disallowance following the Supreme Court’s judgment in Checkmate Services Pvt. Ltd. for actual delays. However, regarding the remaining ₹1.69 crores, the Tribunal noted the taxpayer’s claim that payments were initially made within prescribed due dates but were reversed due to technical glitches on the EPFO portal. Bank statements showed sufficient funds and prompt re-deposits after reversals. The taxpayer also submitted correspondence with PF authorities about the portal issues. The ITAT highlighted CBDT Circular No. 261/1979, which deems payments valid on the date cheques are tendered if honored later, as a guiding principle applicable here. However, since these claims were not fully examined by lower authorities due to the absence of submitted evidence, ITAT remanded the matter to the AO for fresh evaluation. The AO is directed to verify the evidence and, if validated, delete the additions. The Tribunal partly allowed the appeal for statistical purposes, emphasizing that technical failures beyond the taxpayer’s control should not result in penal additions.
