SALASAR LAMINATES LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1)
What did the High Court hold?
The Gujarat High Court dismissed the appeal filed by the assessee. The Court acknowledged that the issue was covered by its own prior judgment in CIT vs. GSRTC. While the assessee sought the benefit of a potentially favorable Supreme Court decision on the pending SLP, the Court opted for a pragmatic approach due to the small disputed amount. The appeal was dismissed at that stage, but with a specific liberty granted to the assessee. The assessee was permitted to revive the appeal by filing an application within three months from the date of the Supreme Court's judgment, should the Supreme Court reverse the decision in CIT vs. GSRTC. This conditional dismissal aimed to provide the assessee with the benefit of the Supreme Court's ruling without requiring them to file a fresh appeal if the precedent was overturned.
What were the facts?
The assessee, Salasar Laminates Limited, filed an appeal before the Gujarat High Court challenging the order of the Income Tax Appellate Tribunal (Tribunal) dated March 22, 2018. The appeal pertained to Assessment Year 2013-14 and involved a dispute over the deductibility of Rs. 20,34,916, which represented the employees' contribution towards Provident Fund and ESI. The assessee had deposited these contributions but missed the statutory deadlines. Consequently, the Revenue disallowed the deduction. The Tribunal upheld this disallowance, relying on the High Court's judgment in CIT vs. Gujarat State Road Transport Corporation Limited (366 ITR 170). The assessee acknowledged that the issue was covered by the Gujarat High Court's precedent but noted that a Special Leave Petition (SLP) was pending before the Supreme Court against that judgment.
What were the issues?
1. Whether the employees' contribution towards Provident Fund and ESI, deposited after the statutory deadline, is an allowable deduction from the assessee's income under the Income Tax Act, 1961? Assessee's Contention: The assessee acknowledged that the issue was squarely covered by the Gujarat High Court's judgment in CIT vs. GSRTC. However, the assessee pointed out that an SLP was pending before the Supreme Court against the GSRTC judgment. Given the relatively small amount in dispute and the expense of pursuing an appeal to the Supreme Court, the assessee requested that the benefit of the Supreme Court's judgment, if it reversed the High Court's decision, be made available to them. Revenue's Contention: The judgment does not record any specific arguments made by the Revenue in this appeal before the High Court.
Which sections of the Income-tax Act were involved?
Section 10(2)(xv) (implied, as it deals with deductions, though not explicitly named)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Ahmedabad
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 in 366 ITR 170 [Gujarat].
Counsel for the appellant did not dispute that the issue on hands is squarely covered by this Court in the case of CIT v. GSRTC [Supra]. He, however, submitted that the appeal is pending against the judgment of the High Court before the Supreme Court and SLP has been granted. The amount involved is not very large and it would be extremely expensive for the assessee to carry this in appeal before the Supreme Court. He, therefore, suggested that the benefit of this judgment of the Supreme Court may be made available to the assessee; as and when rendered and in case, the judgment of the High Court is reversed.
Two clear ways are possible to enable the appellant- assessee to get benefit of the judgment of the Supreme Court, in case the High Court judgment is reversed. One is to dismiss this C/TAXAP/1186/2018 ORDER appeal and allow the assessee to approach the Supreme Court; like some other assesses would have. The other way is to make some arrangement under which without filing the appeal, the assessee would also be able to claim the benefit of the judgment. Looking to the smallness of the disputed amount, we adopt the latter option by providing as under : This appeal at this stage is dismissed. However, if the Supreme Court reverses the judgment 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 judgment.
Appeal stands disposed of accordingly. [Akil Kureshi, J.] [B.N Karia, J.] Prakash
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