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2023 (9) TMI 1663 - HC - Income TaxEmployees contribution concerning provident fund and towards insurance was deposited beyond the date prescribed under the subject statute - due date fell on a national holiday - Whether assessee could claim deduction u/s 36(1)(5)(A) concerning the employees contribution to Provident Fund which was deposited on 16.08.2018 as the due date fell on a national holiday i.e. 15.08.2018? - HELD THAT - According to us the submission advanced by Appellant cannot be accepted. Since the due date fell on a date which was a National Holiday the deposit could have been made by the respondent/assessee only on the date which followed the National Holiday. Respondent as noticed on 12.01.2023 is right that Section 10 of the General Clauses Act would help the respondent/assessee to tide over the objections raised on behalf of the appellant/revenue. Therefore question of law as framed is answered against the appellant/revenue and in favour of the respondent/assessee. 1. ISSUES PRESENTED and CONSIDERED The court considered the following core legal questions:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Deduction of Late Deposits Relevant Legal Framework and Precedents: The Tribunal relied on precedents, including the Division Bench judgment in Commissioner of Income Tax vs. AIMIL Limited and another judgment in PCIT vs. Pro Interactive Service (India) Pvt. Ltd., which allowed deductions if deposits were made before filing the income tax return under Section 139(1) of the Act. Court's Interpretation and Reasoning: The court observed that the Supreme Court in Checkmate Services P Ltd vs. Commissioner of Income Tax had taken a contrary view, necessitating a reversal of the Tribunal's decision. Key Evidence and Findings: The Tribunal's decision was based on established judgments allowing deductions for deposits made before filing returns, despite being beyond statutory deadlines. Application of Law to Facts: The court concluded that the Supreme Court's ruling in Checkmate Services P Ltd. was the prevailing law, rendering the Tribunal's decision unsustainable. Treatment of Competing Arguments: Mr. Chopra argued against disallowance under Section 143(1) of the Act, but the court found this unsustainable in light of the Supreme Court's decision. Conclusions: The court ruled in favor of the appellant/revenue, disallowing the deduction for late deposits. Issue 2: Deposit on a National Holiday Relevant Legal Framework and Precedents: The respondent/assessee relied on Section 10 of the General Clauses Act, 1897, which allows actions due on a holiday to be performed on the next working day. Court's Interpretation and Reasoning: The court agreed with the respondent/assessee, noting that the deposit on 16.08.2018 was valid since the due date fell on a national holiday. Key Evidence and Findings: The respondent/assessee had attempted to deposit the amount on 14.08.2018, but due to the holiday on 15.08.2018, the deposit was made on 16.08.2018. Application of Law to Facts: The court applied Section 10 of the General Clauses Act, allowing the deposit to be considered timely. Treatment of Competing Arguments: Mr. Rai argued for disallowance due to the late deposit, but the court found the holiday justified the delay. Conclusions: The court ruled in favor of the respondent/assessee, allowing the deduction for the deposit made on 16.08.2018. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning: "Since the due date fell on a date which was a National Holiday, the deposit could have been made by the respondent/assessee only on the date which followed the National Holiday." Core Principles Established:
Final Determinations on Each Issue:
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