Manpower Services India Pvt Ltd Vs ACIT (ITAT Delhi)
Fixed-Term Staff Also Qualify: ITAT Delhi Allows ₹24.16 Cr Deduction u/s 80JJAA to Manpower Services –
Manpower Services India Pvt. Ltd. (MSPL), a subsidiary of Manpower Holdings Inc. USA, provides staffing solutions across India. For AY 2020-21, it claimed deduction of ₹24.16 Cr u/s 80JJAA (30% of additional wages for 3 consecutive years). AO & DRP denied the claim holding that employees were temporary, deputed to client sites, lacked continuity, and hence no employer-employee relationship existed. They also rejected the claim citing one-day delay in filing Form 10DA.
Tribunal analysed service agreements with customers & fixed-term contracts with employees. It found that MSPL retained full control over appointment, remuneration, relocation, reassignment, disciplinary action & termination. Customers only had operational supervision. Salary slips, TDS (Form 24Q/16), PF/ESI contributions & confirmations from customers supported the existence of employer-employee relationship. Tribunal held that amended section 80JJAA (post-2016) allows claim even for fixed-term employees provided conditions like 240 days service & PF participation are met. AO’s reliance on pre-amendment conditions was misplaced.
On delay of 1 day in filing Form 10DA, Tribunal condoned delay citing Covid-related hardship & judicial precedents (Shivalik Prints Ltd., Sai Computers Ltd., Svasti Microfinance Pvt. Ltd.) which held that procedural lapses cannot defeat substantive claim. Tribunal directed AO to verify & allow carry-forward claims of earlier years (AYs 2018-19 & 2019-20) as part of 3-year cycle.
