Tandem Data Processing Pvt. Ltd. Vs ADIT (ITAT Ahmedabad)
The case Tandem Data Processing Pvt. Ltd. vs. ADIT before ITAT Ahmedabad dealt with the disallowance of ₹4,32,177 under Section 36(1)(va) of the Income Tax Act for a delayed deposit of employees’ Provident Fund (PF) and ESIC contributions. The Assessee argued that the payment was made within the due date of August 15, 2017, but the credit reflected on August 16 due to server issues. The Assessing Officer (AO) disallowed the deduction, and the CIT(A) upheld this decision, citing amendments to Section 36 and the Supreme Court’s ruling in the Checkmate Services Pvt. Ltd. vs. CIT case.
The Tribunal observed that the delay in crediting the payment was due to technical glitches beyond the assessee’s control. It ruled that the disallowance was unwarranted since the payment was made within the statutory timeline as evidenced by challans. ITAT relied on the precedent set in FIL India Business & Research Services Pvt. Ltd. vs. DCIT, where similar circumstances of delays caused by glitches were not penalized. Consequently, the disallowance under Section 36(1)(va) was deleted, allowing the appeal.
This decision highlights the importance of differentiating genuine delays due to technical issues from non-compliance. The case emphasizes that taxpayers should not be penalized for delays beyond their control, provided they adhere to statutory deadlines.
