Delhi ITAT: Timely Deposit PF and ESI Contribution to Avail Tax Deductions

The Income Tax Appellate Tribunal’s Delhi Bench has told businesses that if they want to avail themselves of the income tax deduction benefits, they have to deposit employees’ EPF and ESI on time.

The Supreme Court’s decision was upheld by a two-member bench of Narendra Kumar Choudhary, a judicial member, and Anil Chaturvedi, an accountant member. The decision was made in the case of Checkmate Services Pvt. Ltd. vs. Commissioner of Income Tax No. The non-obstante clause under Section 43B of the I-T Act or anything that comes under the provision will not exempt the assessee from the liability to deposit EPF or ESI on time to get the deduction as per the Supreme Court’s decision.

The assessor claims to be a financial institution and finances residential construction or purchases of houses in India for the long term.

Read Also: PF & ESI Should Be Paid Before Deadline to Permit Deduction U/S 43B

AO made the arrangement considering the delay in the deposit of employees’ PF and ESI dues because it was paid before the income tax return filing due date. The action was supported by CIT (A).

The statement was carried out under Section 143(1) of the Income Tax Act, and the matter was raised when the firm disallowed the delayed deposit of PF and ESI.

The deduction under Section 36(1)(VA) of the Income Tax Act was supported by the tribunal and can be allowed. This is possible if the employer deposits the funds before the due date.