2018 (3) TMI 1775 - AT - Income Tax

Addition u/s 36(1)(va) r.w.s. 2(24)(x) - late payment of Employees Contribution to PF/ESI - HELD THAT - The issue in question is squarely covered against the assessee by 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 (supra), 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 - Decided against assessee.

Summary

Issues:
Challenge to correctness of the order dated 20th December, 2016 passed by the CIT(A)-1, Vadodara in the matter of assessment under section 143(3) of the Income-tax Act, 1961, for the assessment year 2013-14.

Analysis:
The appeal challenged the correctness of the order passed by the CIT(A)-1, Vadodara regarding the assessment under section 143(3) of the Income-tax Act, 1961 for the assessment year 2013-14. The primary grievance of the assessee was the confirmation of additions amounting to ?1,01,72,543/- (PF) and ?15,14,548/- (ESI) by the CIT(A). These additions were made by the Assessing Officer under Section 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961, due to late payment of Employees' Contribution to PF/ESI.

The representatives of both parties agreed that the issue was decisively settled against the assessee by the judgment of the jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.). The High Court held that delayed deposits of employees' contributions to PF would not be deductible in computing income under section 28 of the Act. This legal precedent was deemed binding. The dismissal of SLP in the case of Rajasthan State Beverages Corporation Ltd was also discussed, highlighting that a non-speaking order of dismissal does not constitute a binding law declared by the Supreme Court.

The Tribunal found no legally sustainable merit in the case of the assessee and, in accordance with the judgment of the jurisdictional High Court in the case of Gujarat State Road Transport Corporation, the appeal of the assessee was dismissed. The decision was pronounced in open court on 22nd March, 2018.