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

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ITA/293/2010HC KeralaKLHC01026985201002 November 2018Bench: 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, 1961. The Court relied on its 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 permissible only if the employee's contribution is paid within the prescribed due date. The ratio decidendi is that late payment of employee's EPF contribution disentitles the assessee to a deduction under the said section. 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. The assessee is challenging the disallowance of employee contributions to the Employees' Provident Fund (EPF) paid after the due date prescribed under the EPF & MP Act, 1952. The revenue is the Assistant Commissioner of Income Tax, Ernakulam. The core of the dispute revolves around the deductibility of these delayed payments under the Income Tax Act, 1961.

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? (Question of law) Assessee's Contention: The assessee contends that employee contributions paid after the due date under the EPF & MP Act, 1952, should be allowed as a deduction. The specific arguments or precedents relied upon by the assessee are not recorded in the judgment. Revenue's Contention: The revenue contends that such delayed payments are not eligible for deduction. The judgment indicates that the revenue's position was upheld by the High Court.

Which sections of the Income-tax Act were involved?

Section 36(1)(va)

AI-generated summary — verify with the full judgment below

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. Sd/- K. VINOD CHANDRAN JUDGE Sd/- ASHOK MENON JUDGE sp/07/11/18 //True Copy// P.A. To Judge

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

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