One-day EPF and ESI remittance delay caused by portal failure cannot justify disallowance under section 36(1)(va), Tribunal holds

5-Second Takeaway

The Tribunal held that a one-day delay in remitting employees’ EPF and ESI contributions, caused by non-availability of the EPFO portal and technical glitches, could not justify disallowance under section 36(1)(va). It directed reversal of the CPC’s prima facie adjustment under section 143(1)(a).

The assessee claimed deduction for employees’ contribution to EPF and ESI, but the CPC made a prima facie adjustment and disallowed the amount on the ground of delayed remittance under section 36(1)(va). The dispute concerned a one-day delay in respect of the May 2021 contribution.

The Tribunal noted that the ECR return was filed on 15 June 2021 and was accepted as filed within time. The payment had been scheduled on the due date, but the amount was actually debited from the assessee’s bank account only at 7.30 a.m. on 16 June 2021.

On the facts, the delay was found to have arisen from circumstances beyond the assessee’s control, including non-availability of the EPFO website and technical glitches in the payment gateway. The Tribunal also referred to the EPFO’s later circular and related materials supporting the temporary unavailability of the portal.

Holding that an accidental delay of this kind could not, by itself, amount to a fatal breach of the deduction condition, the Tribunal treated the remittance as having been made within the prescribed due date and directed deletion of the disallowance.