EPF/ESI Contributions must Be Deposited within Statutory Due Date: ITAT Rejects Plea of Technical Glitches, Disallows Deduction [Read Order]
The bench upheld the disallowance made by the CPC and sustained by the CIT(A), observing that “technical glitches” could not be a ground to extend the due date or relax the statutory requirement.
![EPF/ESI Contributions must Be Deposited within Statutory Due Date: ITAT Rejects Plea of Technical Glitches, Disallows Deduction [Read Order]](https://images.taxscan.in/h-upload/2025/10/10/2095344-pf-esi-pf-esi-tax-deduction-taxscan.webp "EPF/ESI Contributions must Be Deposited within Statutory Due Date: ITAT Rejects Plea of Technical Glitches, Disallows Deduction [Read Order]")
The Delhi Bench of the Income Tax Appellate Tribunal ( ITAT ) has reiterated that employees’ contributions to EPF/ESI must be deposited strictly within the statutory due dates prescribed under the relevant Acts, and any delay irrespective of being for one or two days renders the claim for deduction inadmissible.
The Tribunal dismissed the appeal against disallowance of ₹54.77 lakh for belated deposit of employees’ share of EPF, holding that the assessee’s plea of “technical glitches” could not override the clear mandate of law.
The assessee, Tangerine Design Pvt. Ltd. contended that most payments were debited from its bank account prior to the due dates, and any subsequent delay in crediting to EPF/ESI accounts was attributable to system errors beyond its control.
It was contended by the assessee that the payments of the same were mostly debited from bank account of assessee prior to the due date and delay in PF/ESI Account was on account of some technical glitches which cannot be attributed to assessee.
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It also relied on earlier relief granted by the CIT(A) in AY 2015-16 and Delhi High Court rulings in CIT v. AIMIL Ltd. and CIT v. SPL Industries Ltd., where such contributions were allowed if deposited before the due date of filing return under section 139(1).
However, the Tribunal noted that the legal position has been conclusively settled by the Supreme Court in Checkmate Services Pvt. Ltd. v. CIT (2022), which held that employees’ contributions are distinct from employer’s contributions and must be deposited within the statutory due date prescribed under the EPF/ESI laws, failing which deduction under section 36(1)(va) is not permissible.
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Following the Apex Court’s ruling, the bench of Sudhir Kumar (Judicial member) and Manish Agarwal (Accountant member) upheld the disallowance made by the CPC and sustained by the CIT(A), observing that “technical glitches” could not be a ground to extend the due date or relax the statutory requirement.
By dismissing the appeal, the Tribunal upheld the need that employees strictly stick to the specified dates in order to receive a deduction for their contributions.
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