2019 (7) TMI 998 - HC - Income Tax

Disallowance of deduction u/s.36(1)(va) r.w.s. 2(24)(x) - Employees' contribution to PF and ESI - failure to deposit before due date - HELD THAT - A decided in DECO MICA LIMITED VERSUS DEPUTY COMMISSIONER OF INCOME TAX 2018 (10) TMI 1696 - GUJARAT HIGH COURT assessee did deposit such amount of contribution towards PF ESIC accounts, however, missed the deadline prescribed in the statutes for such purpose. On account of this, the Revenue did not permit deduction of such sum from the income of the assessee. Such disallowance thereupon became the subject matter of appeal before the Tribunal. The Tribunal dismissed the ground, relying upon the judgment of this Court in the case of Commissioner of Income-tax vs. Gujarat State Road Transport Corporation Limited, reported 2014 (1) TMI 502 - GUJARAT HIGH COURT The question of law proposed in the present appeal is squarely covered by the aforesaid order passed by this Court. In such circumstances referred to above, this appeal, at this stage, is dismissed. However, if the Supreme Court reverses the judgement in the case of CIT vs. GSRTC (Supra), it would be open for the appellant to revive this appeal by filing an application for such purpose within three months from the date of the judgement. - Decided against assessee.

Summary

Issues involved:
1. Disallowance of deduction u/s.36(1)(va) r.w.s. 2(24)(x)
2. Revival of appeal based on Supreme Court judgment

Analysis:
1. The Tax Appeal under Section 260-A of the Income Tax Act, 1961 was filed by the Assessee against the order passed by the Income Tax Appellate Tribunal for the Assessment Year 2012-13. The primary issue raised was the disallowance of deduction u/s.36(1)(va) r.w.s. 2(24)(x) amounting to ?20,70,055. The appellant questioned whether the Appellate Tribunal erred in upholding this disallowance. The learned counsel for the appellant referred to a previous order by the coordinate Bench related to a similar issue concerning the deductibility of employees' contribution towards Provident Fund and ESI. The Tribunal had dismissed the ground based on a previous judgment. The counsel acknowledged the issue's similarity to the previous case but highlighted that an appeal was pending before the Supreme Court, suggesting that the appellant should benefit from the Supreme Court judgment if the High Court's decision is overturned.

2. The Court noted that the question of law proposed in the present appeal was covered by the previous order. In light of this, the appeal was dismissed at that stage. However, the Court provided an option for the appellant to revive the appeal if the Supreme Court reverses the judgment in the related case. The appellant was granted the opportunity to file an application for revival within three months from the date of the Supreme Court's judgment reversal. This arrangement was made considering the small disputed amount involved in the case. The appeal was disposed of accordingly, leaving the door open for potential revival based on the Supreme Court's decision.