COMMISSIONER OF INCOME TAX-I vs. KARAN KANWAL GROVER

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TAXAP/450/2007HC GujaratGJHC24040368200711 December 2014Bench: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Gujarat, while admitting the appeal, had framed two substantial questions of law concerning the deletion of disallowance under Section 36(1)(va) r.w.s. 43B for delayed payment of employees' provident fund contribution and the potential redundancy of certain statutory provisions due to the ITAT's interpretation. However, at the time of final hearing, the learned advocate for the appellant (revenue) submitted that the amount involved was small and the revenue effect was low. Citing a CBDT Instruction, the revenue argued that the appeal should not have been filed and therefore ought to be dismissed. The High Court accepted this submission and answered the questions in favour of the assessee and against the revenue. The appeal was accordingly dismissed. No specific finding on the merits of the legal issues was recorded by the High Court.

What were the facts?

The appellant, Commissioner of Income Tax-I, filed an appeal before the High Court of Gujarat challenging the order dated June 1, 2006, passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad. The ITAT's order pertained to ITA No. 1647/Ahd/2004 for the Assessment Year 2001-02. The appeal was admitted by the High Court on October 30, 2007, with specific substantial questions of law framed for consideration. The dispute involved a disallowance made under Section 36(1)(va) read with Section 43B of the Income Tax Act, 1961, concerning employees' contribution to provident fund amounting to Rs. 1,87,858, paid beyond the due date specified in the Provident Fund Act.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the disallowance made under Section 36(1)(va) r.w.s. 43B of the Act in respect of employees' contribution of Rs.1,87,858/- to provident fund paid beyond the due date specified in the Provident Fund Act? (Question of law) 2. Whether the interpretation of the Appellate Tribunal does not render the provisions of section 2(24)(x), 36(1)(va) and the Explanation below section 36(1)(va) totally redundant, merely on the basis of the deletion of the second proviso to Section 43B, which has no nexus with Section 36(1)(va) read with Section 2(24)(x)? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The High Court's decision was based on the revenue's submission. Revenue's Contention: The learned advocate for the appellant (revenue) stated that the amount involved in the present case is small, and there is a low revenue effect. Therefore, as per CBDT Instruction, the revenue ought not to have filed an appeal, and the appeal should be dismissed.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 43B,Section 2(24)(x)

AI-generated summary — verify with the full judgment below

O/TAXAP/450/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 450 of 2007

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI

and HONOURABLE MR.JUSTICE K.J.THAKER ============================================================ ==== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ COMMISSIONER OF INCOME TAX-I....Appellant(s) Versus KARAN KANWAL GROVER....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 RULE SERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 3

O/TAXAP/450/2007 JUDGMENT

Date : 11/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant­revenue has challenged the judgment and order dated 01.06.2006 passed   by   the   Income­tax   Appellate   Tribunal, Ahmedabad, in ITA No. 1647/Ahd/2004 for the Assessment Year 2001­02. 2. While   admitting   this   appeal   on   30.10.2007, this   Court   has   framed   the   following   substantial question of law: “[A]  Whether,   on   the   facts   and   in   the circumstances   of   the   case,   the   Appellate Tribunal was right in law in deleting the disallowance   made   under   Section   36(1)(va) r.w.s.   43B   of   the   Act   in   respect   of employees' contribution of Rs.1,87,858/­ to provident   fund   paid   beyond   the   due   date specified in the Provident Fund Act? (B)   Whether   the   interpretation   of   the Appellate   Tribunal   does   not   render   the provisions   of   section   2(24)(x),   36(1)(va) and the Explanation below section 36(1)(va) totally   redundant,   merely   on   the   basis   of the   deletion   of   the   second   proviso   to Section 43B, which has no nexus with Section 36(1)(va) read with Section 2(24)(x)” Page 2 of 3

O/TAXAP/450/2007 JUDGMENT 3. Learned advocate for the appellant states that the amount involved in the present case is small one and there is low revenue effect, and therefore, as per CDBT Instruction, the revenue ought not to have come in appeal, and therefore, this appeal is required to   be   dismissed.   In   that   view   of   the   matter,   the question is answered in favour of the assessee and against   the   revenue.   This   appeal   is   dismissed accordingly. (K.S.JHAVERI, J.) (K.J.THAKER, J)

pawan Page 3 of 3

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