Case Law Details
Naveen Chandra Bhatt Vs ITO (ITAT Delhi)
The case of Naveen Chandra Bhatt Vs ITO (ITAT Delhi) offers critical insights into the legal repercussions of belated deposit of employees’ contributions to Provident Fund/ESIC. The case examines the regulatory framework and underlying tax implications surrounding the late submission of these contributions under the Income Tax Act.
Analysis
The appeal by the assessee, Naveen Chandra Bhatt, was against the order of the Ld. NFAC, New Delhi, concerning Assessment Year 2019-20. The principal dispute concerned the disallowance of employees’ contributions to Provident Fund/ESIC under sections 36(i)(va) and 43B of the Act. The Central Processing Centre (CPC) made additions of Rs. 27,70,629/- to the returned income of the assessee due to the late deposit of these contributions.
In defending its position, the Revenue department cited previous rulings, including Checkmate Services (P.) Ltd. vs CIT and Cemetile Industries vs ITO. These cases support the position that even for Assessment Years before 2021-22, belated deposits of employees’ contributions are taxable income under sections 2(24)(x) and 43B of the Act. Moreover, the deduction under section 36(i)(va) of the Act would not be permissible in the case of belated payments.
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