HARRISONS MALAYALAM LTD., vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,

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ITA/299/2010HC KeralaKLHC01026991201002 November 2018Author: HONOURABLE MR.JUSTICE K.VINOD CHANDRAN,HONOURABLE MR. JUSTICE ASHOK MENON4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that employee's contribution paid after the due date as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, cannot be claimed as a deduction under Section 36(1)(va) of the Income Tax Act. The Court relied on its own previous decision in Popular Vehicles and Services Pvt. Ltd. v. Commissioner of Income Tax [(2018) 406 ITR 150 (Ker)]. The reasoning is that the deduction under Section 36(1)(va) is contingent upon the timely payment of the employee's contribution as per the EPF & MP Act. The ratio decidendi is that the specific provisions of Section 36(1)(va) mandate timely remittance of employee contributions for deductibility. The appeals were dismissed, with the question of law answered against the assessee and in favour of the Revenue.

What were the facts?

These appeals by Harrisons Malayalam Ltd. (the assessee) are directed against the order of the Income Tax Appellate Tribunal, Cochin Bench, dated September 24, 2007. The appeals concern assessment years not explicitly stated in the provided text, but the core dispute revolves around the deductibility of employee contributions to the Employees' Provident Fund (EPF) paid after the statutory due date. The assessee is challenging the disallowance of these contributions as a deduction. The Assistant Commissioner of Income Tax, Ernakulam, is the respondent (Revenue). The High Court of Kerala is hearing these appeals, which were consolidated for final hearing.

What were the issues?

1. Whether employee's contribution to EPF paid after the due date as per the EPF & MP Act, 1952, can be claimed as a deduction under Section 36(1)(va) of the Income Tax Act, 1961. The assessee contends that such contributions, even if paid late, should be allowed as a deduction. The Revenue argues that for the deduction to be admissible under Section 36(1)(va), the employee's contribution must be paid within the due date prescribed by the EPF & MP Act, 1952. The Tribunal's order upheld the Revenue's view. The High Court is asked to decide this question of law.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

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 K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 02ND DAY OF NOVEMBER 2018 / 11TH KARTHIKA, 1940 ITA. No.293 of 2010 AGAINST THE ORDER IN ITA NO.257/2007 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 24-09-2007 APPELLANT/APPELLANT: HARRISONS MALAYALAM LTD, BRISTOW ROAD, WILLINGDON ISLAND, KOCHI-3. BY ADVS. SRI.E.K.NANDAKUMAR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH RESPONDENT/RESPONDENT: THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(I), ERNAKULAM,. SRI. PKR MENON, SENIOR COUNSEL FOR GOI TAXES THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 02.11.2018, ALONG WITH ITA. NO.299 OF 2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA. Nos.293 & 299 of 2010 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON FRIDAY, THE 02ND DAY OF NOVEMBER 2018 / 11TH KARTHIKA, 1940 ITA.No. 299 of 2010 AGAINST THE ORDER IN ITA NO.63/2007 OF THE INCOME TAX APPELLATE TRIBUNAL, COCHIN BENCH DATED 24-09-2007 APPELLANT/APPELLANT: HARRISONS MALAYALAM LTD, BRISTOW ROAD, WILLINGDON ISLAND, KOCHI-3. BY ADVS. SRI.E.K.NANDAKUMAR SMT.PREETHA S. NAIR SRI.K.JOHN MATHAI SRI.P.BENNY THOMAS SRI.P.GOPINATH RESPONDENT/RESPONDENT: THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 1(I), ERNAKULAM,. SRI. PKR MENON, SENIOR COUNSEL FOR GOI TAXES THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 02.11.2018, ALONG WITH ITA. NO.293 OF 2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ITA. Nos.293 & 299 of 2010

JUDGMENT K. Vinod Chandran, J. Both the appeals are on identical issue and raise the same question of law as to whether the employees contribution paid after the due date as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (for brevity, 'EPF & MP Act') can be claimed as deduction under Section 36(1)(va) of the EPF & MP Act. The issue stands covered in favour of the Revenue as held by us in Popular Vehicles and Services Pvt. Ltd. v. Commissioner of Income Tax [(2018) 406 ITR 150 (Ker)].

Hence the question of law is answered against the assessee and in favour of the Revenue and the appeal stands dismissed. K. VINOD CHANDRAN JUDGE ASHOK MENON JUDGE sp/07/11/18 //// P.A. To Judge

ITA. Nos.293 & 299 of 2010 APPENDIX OF ITA NO.293 OF 2007 PETITIONER'S EXHIBITS: ANNEXURE-AOF THE ASSESSMENT ORDER FOR 2001- 02 ISSUED BY THE INCOME TAX DEPARTMENT TO THE APPELLANT DATED 24/02/2004. ANNEXURE-BOF THE ORDER ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) TO THE APPELLANT DATED 18/01/2007. ANNEXURE-COF THE TRIBUNAL ORDER DATED 24/09/2007 ISSUED TO THE APPELLANT. APPENDIX OF ITA NO.299 OF 2007 PETITIONER'S EXHIBITS: ANNEXURE-AOF THE ASSESSMENT ORDER FOR 2002- 03 ISSUED BY THE INCOME TAX DEPARTMENT TO THE APPELLANT DATED 30/03/2006. ANNEXURE-BOF THE ORDER ISSUED BY THE COMMISSIONER OF INCOME TAX (APPEALS) TO THE APPELLANT DATED 06/11/2006. ANNEXURE-COF THE TRIBUNAL ORDER DATED 24/09/2007 ISSUED TO THE APPELLANT.

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