Dignus Services Vs ITO (ITAT Delhi)
The assessee filed two appeals against the orders of the Commissioner of Income Tax (Appeals), challenging the sustenance of disallowance under Section 43B of the Income-tax Act in respect of Provident Fund (PF) and Employees’ State Insurance (ESI) contributions.
The assessee submitted that while processing the return, the Centralised Processing Centre (CPC) disallowed Rs. 1,77,54,030 representing both employees’ and employers’ contributions towards PF and ESI based on the tax audit report. According to the assessee, the tax audit report mistakenly reported the contributions relating to both employees and employers, and the error was subsequently corrected through a revised tax audit report, which was not considered by the authorities below. The assessee furnished a break-up of PF and ESI contributions showing amounts deposited before the due date under the respective Acts, amounts deposited after the statutory due date but before the due date for filing the return under Section 139(1), and a small portion deposited even after the return filing due date.
Regarding the employers’ contribution to PF and ESI, the assessee contended that all such contributions had been remitted before the due date for filing the return of income and were therefore allowable as deductions. The Tribunal observed that employers’ contributions are allowable if remitted before the due date for filing the return of income. Since the assessee claimed that this condition had been satisfied, the Tribunal directed the Assessing Officer to verify the factual position and allow the deduction if the contributions had indeed been remitted before the due date for filing the return.
