Vigilant Security Placement & Detective Services Pvt. Ltd. Vs DCIT (ITAT Delhi)
The assessee appealed against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2019-20 challenging the disallowance of Rs. 2,65,53,841 on account of delayed deposit of employees’ contributions to Provident Fund (PF) and Employees’ State Insurance (ESI). The disallowance arose during processing of the return under Section 143(1) after the Central Processing Centre (CPC) found that the employees’ contributions had not been deposited within the due dates prescribed under the PF and ESI Acts. The first appellate authority upheld the disallowance.
Before the Tribunal, the assessee contended that, as a matter of fact, there was no delay in depositing the employees’ contributions. It was submitted that the relevant month for determining the due date should be the month in which salaries or wages were actually disbursed. According to the assessee, for salaries relating to April 2018 to March 2019, the corresponding due dates for deposit ranged from 15.06.2018 to 15.05.2019. On this basis, the assessee argued that the deposits had been made within time. Reliance was placed on the decisions in Fluid Air (India) vs. DCIT and Kanoi Paper & Industries Ltd. vs. ACIT. Without prejudice, the assessee also contended that the disallowance could not have been made through an adjustment under Section 143(1) of the Income-tax Act.
