The Delhi High Court ruled that Provident Fund (PF) and Employee State Insurance (ESI) payments made after the due date due to a National Holiday are eligible for deduction.
➡️ The case involved M/s. Aero Club, which questioned whether the Income Tax Appellate Tribunal misinterpreted the law by not considering that the PF and ESI payments were originally due on a National Holiday (15.08.2018) and were subsequently deposited on the following day (16.08.2018).
➡️ ESI is a contributory fund that allows Indian employees to participate in a self-financed healthcare insurance fund, with contributions from both employees and employers, managed by the Employees’ State Insurance Corporation.
➡️ The Employees Provident Fund (EPF) is also a contributory fund with contributions from both employees and employers, made compulsory by “The Employees’ Provident Fund and Miscellaneous Provisions Act 1952” for Indian organizations.
➡️ The court based its decision on the precedent set in the Pepsico Ltd. case, stating that when a due date falls on a National Holiday, the deposit can be made on the following day, with reference to Section 10 of the General Clauses Act. The ruling favored the appellant/assessee and went against the respondent/revenue.
✔️ M/S. AERO CLUB vs ASSISTANT COMMISSIONER OF INCOME TAX