KALYAN SILKS TRICHUR vs. JOINT COMMISSIONER OF INCOME TAX

ITA/68/2016HC KeralaKLHC01026867201616 October 2017Author: HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU,HONOURABLE MR.JUSTICE ANTONY DOMINIC5 pages
AI SummaryDismissed

What were the facts?

These appeals were filed by the assessee, Kalyan Silks Trichur (P) Ltd., challenging a common order of the Income Tax Appellate Tribunal (ITAT), Kochi Bench, for Assessment Years 2008-09 and 2009-10. The dispute concerned the disallowance of deductions claimed for belated deposits of employees' contribution to Provident Fund (PF) and Employees' State Insurance (ESI). The ITAT had confirmed the disallowance, relying on its own prior order and High Court judgments. The assessee argued that these deposits were made before the filing of the return under Section 139(1) of the Income Tax Act, 1961, and should be allowed as deductions. The revenue contended that the disallowance was justified.

What did the High Court hold?

The High Court held that the appeals did not give rise to any substantial question of law. The Court noted that the issue regarding the legality of disallowance of deduction for belated deposit of employees' contribution to PF/ESI had been settled by previous judgments of the High Court itself, specifically citing CIT v. South India Corporation (2015) 58 taxmann.com 208 (Kerala) and CIT v. Merchem Ltd. (2015) 61 taxmann.com 119 (Kerala). The Tribunal had decided the cases against the assessee by following these High Court judgments. Since the law was considered settled by these precedents, the Court found no reason to interfere or reconsider the matter. Consequently, the appeals were dismissed.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the appellate Tribunal was justified in dismissing the appeal against the impugned orders for the reasons that the employees' contribution to ESI & PF deposited after the statutory period but before filing of returns under Section 139(1) of the IT Act is not entitled to deduction under Section 36(1)(va) of the IT Act? 2. Whether the appellate Tribunal was justified in relying on the decision of this Hon'ble Court in CIT v. Merchem Ltd. (2015) 61 Taxmann.com 119 (Ker) without following the ratio of the decision of the Apex Court in CIT v. Vinay Cements Ltd. (2007) 213 CTR 268 = (2009) 313 ITR (St) sustaining the view that both employees' contribution if deposited before filing of return is an allowable deduction? 3. Whether the decision of this Hon'ble Court in CIT v. Merchem Ltd. deserves to be reconsidered in the light of the Apex Court decision in CIT v. Vinay Cements Ltd. (2007) 213 CTR 268 which was not brought to the notice of this Hon'ble Court? Assessee's Contentions: The assessee argued that deposits of employees' contribution to ESI and PF made before the filing of the return under Section 139(1) should be allowed as deductions, citing the Supreme Court decision in CIT v. Vinay Cements Ltd. They contended that the Tribunal erred in relying on CIT v. Merchem Ltd. and that the latter decision should be reconsidered in light of the Supreme Court's ruling. Revenue's Contentions: The revenue supported the disallowance, relying on the High Court's decision in CIT v. Merchem Ltd. and CIT v. South India Corporation.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 139(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR.JUSTICE ANTONY DOMINIC & THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU MONDAY, THE 16TH DAY OF OCTOBER 2017/24TH ASWINA, 1939 ITA.No. 68 of 2016 ----------------------- AGAINST THE ORDER IN ITA 461/2015 of I.T.A.TRIBUNAL,COCHIN BENCH DATED 29.10.2015 ------------ APPELLANT/APPELLANT IN ITA: ----------------------------------- KALYAN SILKS TRICHUR (P) LTD. CORPORATE OFFICE, 4/621/2, KURIACHIRA POST, THRISSUR-680006. BY ADVS.SRI.K.N.SREEKUMARAN SMT.V.P.SEENA DEVI RESPONDENT/RESPONDENT IN ITA: ---------------------------------------- JOINT COMMISSIONER OF INCOME TAX RANGE-I, THRISSUR-680001. SC SRI.K.M.V. PANDALAI

THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 16-10-2017, A/W ITA 70/16, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

ANTONY DOMINIC, & DAMA SESHADRI NAIDU, JJ. ------------------------------------------------ Income Tax Appeal Nos.68 & 70 of 2016 ------------------------------------------------ Dated this the 16th day of October, 2017 JUDGMENT Antony Dominic, J. 1. aThese appeals are filed by the assessee impugning the com

The order continues below.

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