M/s. Apex Technologies Private Limited vs. Deputy Commissioner of Income Tax

Appellant

M/s. Apex Technologies Private Limited,
Plot No. 42, Okhla Industrial Area, Phase-III,
New Delhi – 110020

Respondent

Deputy Commissioner of Income Tax,
Circle 2(1), Corporate Ward,
New Delhi

Citation	2026 Taxsansar 01 ITAT New Delhi
Court	Income Tax Appellate Tribunal (ITAT), New Delhi “A” Bench
Law	Income Tax Act, 1961
Section	Section 37(1) – Allowance of Business Expenditure & Section 43B – Statutory Dues Payment
In Favor Of	Assessee (M/s. Apex Technologies Private Limited)

Summary of the Case

The present appeal filed by the Assessee is directed against the order of the learned Commissioner of Income Tax (Appeals) [CIT(A)], New Delhi, dated January 15, 2024, confirming the addition made by the Assessing Officer (AO) towards disallowed business expenditure under Section 37(1) read with Section 43B of the Income Tax Act, 1961.
The primary controversy arises out of the action of the Assessing Officer in disallowing a sum of INR 45,50,000/- representing employee contributions to the Provident Fund (PF) and Employee State Insurance (ESI). The Assessee contended that the amount, though deposited beyond the statutory due dates prescribed under the respective Employee Welfare Acts, was fully remitted well before the deadline for filing the regular return of income under Section 139(1) of the Act. The lower authorities, drawing reliance on recent stringent amendments, rejected the Assessee’s submissions and treated the late deposits as deemed income of the employer.

Order

We have heard the rival submissions, perused the material documents placed on record, and carefully examined the judicial precedents cited by both parties during the course of the arguments.
The sole substantive ground of appeal pertains to the disallowance of employee contributions towards welfare funds due to delayed remittance. It is an undisputed factual position that the Assessee executed the actual remittance of the standard funds prior to the extended due date for submission of the return of income under Section 139(1) of the Income Tax Act, 1961. The Revenue argued that the legislative amendment specifically carves out employee welfare contributions from the relaxation provisions of Section 43B.
However, upon structural analysis of the operative facts, it is observed that the remittance delay occurred due to a verifiable systemic outage on the official banking portal, a fact verified by certificates from the designated lead banker. The Assessee cannot be compelled to perform an impossibility under the doctrine of lex non cogit ad impossibilia. Since the objective of the provision is to secure the genuine payment of welfare contributions, and such objective was achieved prior to the submission of the tax return, the addition remains legally unsustainable under these specific circumstances.
Consequently, the dynamic adjustments and additions made by the Assessing Officer, and subsequently sustained by the learned CIT(A), are hereby deleted. The Assessing Officer is directed to recompute the total assessed income after granting full allowance for the stated expenditure under Section 37(1).
In the result, the appeal instituted by the Assessee stands Allowed.
Order pronounced in the open court on this 12th day of July, 2026.