2018 (8) TMI 447 - AT - Income Tax

Addition u/s 36(1)(va) r.w.s. 2(24)(x) for the late payment of Employees Contribution to PF/ESI - Held that - While any delayed deposit of PF/ESI is to be disallowed in terms of Hon ble Gujarat High Court s judgment in the case of Gujarat State Road Transport Corporation (2014 (1) TMI 502 - GUJARAT HIGH COURT) the question as to whether there is a delay or not may be decided by the Assessing Officer in the light of above observations by the coordinate bench. The assessee will get relief if found admissible on that basis. In the result appeals of the assessee are allowed for statistical purposes.

Summary

Issues:
Challenge to correctness of order dated 14.02.2018 and 16.02.2018 by CIT(A)-8, Ahmedabad for assessment under section 143(3) r.w.s. 144C of the Income-tax Act, 1961 for assessment years 2013-14 & 2014-15.

Analysis:
The assessee challenged the addition made by the Assessing Officer under Section 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961 for late payment of Employees' Contribution to PF/ESI. The learned CIT(A) confirmed the additions, relying on the judgment of the Hon'ble jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation, which held that delayed deposits of employees' contributions to PF are not deductible under section 28 of the Act. The Tribunal found this judgment binding and dismissed the assessee's grievance, emphasizing that the dismissal of SLP by the Supreme Court does not constitute a binding precedent. The Tribunal also referred to a co-ordinate bench decision in a similar case where the due date for payment was considered from the actual payment date of wages/salaries, leading to the deletion of the disallowance.

The Tribunal highlighted that while delayed deposits of PF/ESI are to be disallowed based on the Gujarat High Court's judgment, the determination of delay should be made by the Assessing Officer. The Tribunal directed that relief, if found admissible, should be granted to the assessee based on the observations made by the coordinate bench. Ultimately, the appeals of the assessee were allowed for statistical purposes, providing a pathway for potential relief based on the assessment of delay in deposits.

This detailed analysis of the judgment showcases the legal intricacies involved in challenging the correctness of the assessment order regarding late payment of Employees' Contribution to PF/ESI, emphasizing the significance of judicial precedents and the role of the Assessing Officer in determining the admissibility of relief in such cases.