PF/ESI Deduction Allowed if Paid Before ITR Due Date | ITAT

  • News|Blog|Income Tax|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 8 April, 2026

Latest from Taxmann

PF ESI Deduction

Case Details: Sunila Sahu vs. ADIT, CPC - [2026] 184 taxmann.com 410 (Cuttack-Trib.)

Judiciary and Counsel Details

  • George Mathan, Judicial Member & Arun Khopdia, Accountant Member
  • K.C. Jena, Adv. for the Appellant.
  • S.C. Mohanty, Sr. DR for the Respondent.

Facts of the Case

The assessee filed an appeal against the order of the CIT(A), NFAC, for AY 2019-20. The dispute involved employees’ contributions to PF and ESI that were deposited after the deadlines specified under the respective Acts but before the due date for filing the return, and whether such amounts were deductible in light of the amendments to section 36(1)(va) and section 43B introduced by the Finance Act, 2021.

The AO made an addition by disallowing employees’ contributions to PF and ESI paid after the due dates specified in the respective Acts, even though the payments were made before the due date for filing the return. On appeal, CIT(A) upheld the disallowance made by the AO. The aggrieved assessee then filed the instant appeal before the Tribunal.

AAR Held

The Tribunal held that the issue concerned the allowability of PF and ESIC paid after the prescribed deadline but within the due date for filing the return. Regarding the retrospective or prospective operation of the amendment by the Finance Act, 2021, the matter is now settled by the decision of the Hon’ble Delhi High Court in TV Today Network Ltd. [2022] 141 taxmann.com 275 (Delhi), where the High Court held that the amendment to section 36(1)(va) by the Finance Act, 2021, is to operate prospectively. The issue was also decided by the Tribunal in Odyssey Motors (P.) Ltd. v. ACIT [2026] 184 taxmann.com 409 (Cuttack – Trib.) in favour of the assessee.

Therefore, the addition made by the AO and confirmed by the CIT(A) stands deleted.

List of Cases Reviewed

List of Cases Referred to

  • Jambeswar Jena v. ADIT [IT APPEAL No. 102(CTK) OF 2021, dated 6-4-2022] (para 2)
  • CIT v. Podar Cement (P.) Ltd. [1997] 92 Taxman 541 (SC)/[1997] 226 ITR 625 (SC) (para 3)
  • CIT v. Gold Coin Health Food (P.) Ltd. [2008] 172 Taxman 386 (SC)/[2008] 304 ITR 308 (SC) (para 3)
  • Odyssey Motors (P.) Ltd. v. ACIT [IT Appeal No.140(CTK) of 2021, dated 17-8-2022] (para 5).

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that’s easy to read and remain consistent across all imprint and digital publications are applied

Leave a Reply

Your email address will not be published. Required fields are marked *

«
»

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied