No Deduction for Delay in Deposit of Employees’ Contributions to ESIC and PF: ITAT Upholds Disallowance u/s 36(1)(va)

The Income Tax Appellate Tribunal (ITAT) upheld the disallowance of deductions for delayed deposits of employees’ contributions to the Employees’ State Insurance Corporation (ESIC) and Provident Fund (PF) under Section 36(1)(va) of the Income Tax Act, 1961. The case involved an assessee who had delayed depositing employees’ contributions to ESIC and PF beyond the due dates prescribed under the respective laws. The ITAT found that the disallowance was justified, as the contributions were not deposited within the stipulated time frame. This ruling emphasizes the importance of timely compliance with statutory obligations related to employees’ contributions. Employers should ensure they deposit contributions to ESIC and PF on time to avoid disallowances and penalties.