KERALA STATE WAREHOUSING CORPORATION vs. THE COMMISSIONER OF INCOME TAX

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ITA/144/2019HC KeralaKLHC01031007201911 July 2019Author: HONOURABLE MR.JUSTICE C.K.ABDUL REHIM,HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the question of law regarding the deductibility of delayed payments of employees' contribution to the Employees Provident Fund Account under Section 36(1)(va) of the Income Tax Act, 1961, stands decided against the assessee. The Court noted that its own previous rulings in Commissioner of Income Tax V. Merchem Limited, CIT V, Appollo Tyres Ltd., and Popular Vehicles and Services Pvt. Ltd V. Commissioner of Income Tax, as well as a recent decision in I.T.A No.252/2015, had consistently ruled against the assessee on this issue. The Court distinguished the assessee's cited judgment from 2009 (I.T.A.No.1035/2009) and the case of CIT V. Vinay Cement Ltd, stating that those decisions concerned the law as it stood prior to the amendment of Section 43B of the Income Tax Act, 1961, and were therefore not applicable to the present dispute. Consequently, the Court found no reason to interfere with the impugned order of the Tribunal. The appeal was dismissed.

What were the facts?

The assessee, Kerala State Warehousing Corporation, filed an Income Tax Appeal before the High Court of Kerala against an order of the Income Tax Appellate Tribunal (ITAT), Cochin Bench. The appeal concerns assessment years not explicitly stated in the judgment. The core issue revolves around the deductibility of delayed payments of employees' contribution to the Employees Provident Fund Account. The Revenue is the respondent. The procedural history indicates that the High Court is considering the appeal against the ITAT's order, which had likely ruled against the assessee on the deductibility issue.

What were the issues?

1. Whether delayed payments of employees' contribution to the Employees Provident Fund Account are an allowable deduction under Section 36(1)(va) of the Income Tax Act, 1961? Assessee's Contentions: The assessee relied on a judgment passed by another Division Bench of the High Court on 02.12.2009 (I.T.A.No.1035/2009), which allowed an appeal on the same subject matter by following the decision in CIT V. Vinay Cement Ltd, 213 CTR 268. The assessee argued that these prior decisions were applicable. Revenue's Contentions: The Revenue contended that the issue stands decided against the assessee by virtue of rulings reported in Commissioner of Income Tax V. Merchem Limited [(2015)378 ITR 443(Ker.)], CIT V, Appollo Tyres Ltd., [2019 Tax Pub(DT)1986 (Ker.-HC)], and Popular Vehicles and Services Pvt. Ltd V. Commissioner of Income Tax [(2018) 406 ITR 150]. The Revenue also noted that the High Court had recently decided a similar case for M/s.Harrisons Malayalam Ltd., in I.T.A No.252/2015, dated 14.06.2019, following the aforementioned decisions.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.K.ABDUL REHIM & THE HONOURABLE MR. JUSTICE R. NARAYANA PISHARADI THURSDAY, THE 11TH DAY OF JULY 2019 / 20TH ASHADHA, 1941 ITA.No.144 of 2019 AGAINST THE ORDER/JUDGMENT IN ITA 309/2017 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 18-06-2018 APPELLANT/RESPONDENT/APPELLANT/ASSESSEE: KERALA STATE WAREHOUSING CORPORATION 39/1304, WAREHOUSING CORPORATION ROAD, KOCHI-682 016. BY ADVS. SRI.MOHAN PULIKKAL SMT.A.AMRUTHA VIDYADHARAN SRI.NARAYANAN.P.POTTY RESPONDENT/APPELLANT/RESPONDENT/REVENUE: THE COMMISSIONER OF INCOME TAX KOCHI-682 018. SRI. SHAMSUDHEEN V K, GOVERNMENT PLEADER SRI. JOSE JOSEPH, STANDING COUNSEL THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 11.07.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA.No.144 of 2019 2 C.K.ABDUL REHIM, J. & R. NARAYANA PISHARADI, J. ----------------------------------- I.T.A. No.144/2019 -------------------------------------- DATED THIS THE 11th DAY OF JULY, 2019.

JUDGMENT C.K.ABDUL REHIM, J.

The question of law raised in the above Income Tax Appeal is mainly that, whether delayed payments of the employees' contribution made to the Employees Provident Fund Account, is an allowable deduction under section 36(1) (Va) of the Income Tax Act, 1961. 2. We take note of the fact that the question now stands decided against the appellant/assessee and in favour of the Department/Revenue, by virtue of rulings reported in, Commissioner of Income Tax V. Merchem Limited [(2015)378 ITR 443(Ker.)], CIT V, Appollo Tyres Ltd., [2019 Tax Pub(DT)1986 (Ker.-HC)] and Popular Vehicles and Services Pvt. Ltd V. Commissioner of Income Tax [(2018) 406 ITR 150]. We also take note of the fact that, following the above decisions we have recently decided another case relating to M/s.Harrisons Malayalam Ltd., in the ITA.No.144 of 2019 3 judgment in I.T.A No.252/2015, dated 14.06.2019. 3. Learned counsel for the appellant had pointed out another judgment, which is marked as Annexure E in Memorandum of Appeal, passed by another Division Bench of this Court as early as on 02.12.2009 (I.T.A.No.1035/2009), allowing an appeal filed by the assessee on the same subject matter. In the said judgment, this Court had followed the decision in CIT V. Vinay Cement Ltd, 213 CTR 268. Both the judgments mentioned are concerned with the law as it stood prior to the amendment of Section 43B of the Income Tax Act, 1961. Therefore, we are of the opinion that those decisions are not applicable with respect to the present dispute.

Under the above mentioned circumstances, we are of the opinion that interference with the impugned order of the Tribunal is not warranted . Consequently, the appeal fails and the same is hereby dismissed. C.K.ABDUL REHIM, JUDGE ajt R. NARAYANA PISHARADI, JUDGE

ITA.No.144 of 2019 4

Appendix — schedule of exhibits
APPENDIX PETITIONER'S/S EXHIBITS: ANNEXURE A: TRUE COPY OF THE ASSESSMENT ORDER DATED 28.03.13. ANNEXURE B: TRUE COPY OF THE ORDER DATED 31.03.2017 OF THE COMMISSIONER OF INCOME TAX(APPEALS)-1, KOCHI IN ITA NO. 28/R-1/CIT(A)-II/2013-14. ANNEXURE C: CERTIFIED COPY OF THE ORDER DATED 18.06.18 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH IN ITA NO.309/COCH/2017. ANNEXURE D: CERTIFIED COPY OF THE CORRIGENDUM PASSED BY THE ITAT, COCHIN BENCH, IN ITA NO.309/COCH/2017. ANNEXURE E: TRUE COPY OF THE JUDGMENT DATED 2.12.2009 IN ITA NO.1035/2009.

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