#ITAT Delhi ruling

The ITAT Delhi has ruled that employers cannot claim deduction for delayed contributions to PF/ESI merely because the tax department processed the return under Section 143(1) without prior notice. This clarifies that compliance deadlines under labor laws are non-negotiable for tax deductions, impacting all employers relying on automatic processing for compliance. The ruling reinforces strict adherence to payment timelines, regardless of procedural automation.

The ITAT Delhi has ruled that payments for software subscriptions do not constitute Fees for Technical Services under Article 12 of the India-US DTAA, distinguishing them from payments for professional services that do. This clarifies the tax treatment for global SaaS providers operating in India and reinforces the Engineering Analysis Centre precedent, offering critical relief to tech companies structured around subscription models.