2018 (3) TMI 1698 - AT - Income Tax

Late payment of Employees Contribution to PF/ESI - Held that - Issue in question is squarely covered against the assessee by Hon ble jurisdictional High Court s judgment in the case of CIT vs. Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT) wherein it is categorically held that in the case of delayed deposit of employees contribution to PF the same will not be deductable in computing income under section 28 of the Act. The law so laid down by the Hon ble jurisdictional High Court is binding on us. The mere fact that an appeal against the said decision is pending before the Hon ble Supreme Court does not dilute binding nature of this judicial precedent. As regard dismissal of SLP in the case of Rajasthan State Beverages Corporation Ltd. it is only elementary that when a SLP is dismissed by a non-speaking order it does not constitute a law declared by Hon ble Supreme court and as such it is not binding under Article 141 of the Constitution of India. We therefore see no legally sustainable merit in the case of the assessee

Summary

Issues:
Challenge to correctness of order dated 08.11.2016 passed by CIT(A)-8, Ahmedabad regarding assessment under section 143(3) of Income-tax Act, 1961 for assessment year 2013-14. Addition of ?20,34,916 for late payment of Employees Contribution to PF/ESI.

Analysis:
1. The appeal was filed by the assessee challenging the order passed by CIT(A)-8, Ahmedabad related to the assessment under section 143(3) of the Income-tax Act, 1961 for the assessment year 2013-14. The sole grievance of the assessee was the confirmation of the addition of ?20,34,916 for the late payment of Employees Contribution to PF/ESI.

2. During the hearing, no one appeared on behalf of the assessee. The Tribunal observed that the issue in question was decisively settled against the assessee by the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation. The High Court ruling stated that delayed deposit of employees' contribution to PF would not be deductible in computing income under section 28 of the Act. The Tribunal emphasized that the binding nature of this judicial precedent was not diluted by the pendency of an appeal before the Supreme Court. The dismissal of SLP in the case of Rajasthan State Beverages Corporation Ltd was also discussed, clarifying that a non-speaking order of dismissal does not constitute a binding law under Article 141 of the Constitution of India, as per various judgments of the Supreme Court.

3. Based on the legal precedents and the judgment of the Hon'ble jurisdictional High Court in the case of Gujarat State Road Transport Corporation, the Tribunal found no merit in the case of the assessee. Consequently, the appeal of the assessee was dismissed, following the decision of the High Court. The judgment was pronounced on 22nd March 2018 in an open court session.

This detailed analysis of the judgment highlights the key issues involved, the legal arguments presented, and the final decision rendered by the Tribunal based on established legal principles and precedents.