COMMISSIONER OF INCOME TAX-I , JDH vs. M/S ESS ESS KAY ENGG. CO. PVT. LTD.

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ITA/427/2010HC Punjab & HaryanaPHHC01093359201014 September 2010Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue was identical to one previously decided by the same Court in ITA No.325 of 2009, CIT v. M/s Lakhani India Ltd., on November 16, 2009. In that prior decision, the Court had ruled against the revenue. Therefore, following its own precedent, the High Court dismissed the present appeal filed by the revenue. The reasoning implicitly affirms the ITAT's view that employee contributions to PF/ESI are covered under Section 43B and can be paid up to the date of filing the return, as decided in the Lakhani India Ltd. case. No specific finding on the second question was elaborated as the appeal was dismissed based on the earlier ruling.

What were the facts?

The Commissioner of Income Tax (CIT) filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated December 18, 2009, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh. The appeal pertains to the assessment year 2006-07 and challenges the ITAT's decision to dismiss the revenue's appeal. The dispute centers on whether the ITAT was correct in holding that employee contributions to PF/ESI are covered under Section 43B of the Act and can be paid up to the date of filing the return. The ITAT had relied on its earlier decision in the case of Proxima Steel Forge Pvt. Ltd.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in dismissing the appeal of the revenue by relying upon its order in the case of Proxima Steel Forge Pvt. Ltd., holding that the contribution of employees towards PF/ESI is covered under Section 43B of the Income Tax Act, 1961, and the payment in respect of these contributions can be made up to the date of filing of the return under Section 138(1) of the Income Tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in holding so, when the employees' contribution deducted by the employer becomes the employer's income under Section 2(24)(x) of the Income Tax Act, 1961, and is admissible for deduction under Section 36(1)(va) of the Income Tax Act, 1961, subject to its payment within the due dates under the relevant enactments? Contentions: Assessee: Not recorded in the judgment. Revenue: The revenue argued that employee contributions deducted by the employer become the employer's income under Section 2(24)(x) and are deductible under Section 36(1)(va) only if paid within the statutory due dates, implying that Section 43B's extended due date for filing the return is not applicable.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 43B,Section 2(24)(x),Section 36(1)(va),Section 138(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.427 of 2010 Date of decision: 14.9.2010 The Commissioner of Income Tax. -----Appellant. Vs. M/s Ess Ess Kay Engg. Co. Pvt. Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Vivek Sethi, Advocate for the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assessee under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order dated 18.12.2009 of the Income Tax Appellate Tribunal, Chandigarh in I.T.A. No.414(ASR)/2009 for the assessment year 2006-07 proposing to raise following substantial questions of law:- “I Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in dismissing the appeal of the revenue, by relying upon the order of Hon’ble ITAT in the case of Proxima Steel Forge Pvt. Ltd., holding that the contribution of employees towards PF/ESI is covered under section 43B of the Income Tax Act, 1961 and the payment in respect of these contributions can be made upto the date of filing of the return under section 138(1) of the Income Tax Act, 1961.”

I.T.A. No.427 of 2010 II Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in holding so, when the employees contribution deducted by the employer becomes employer’s income under section 2(24)(x) of the Income Tax Act, 1961 and is admissible for deduction under section 36(1)(va) of the Income Tax Act, 1961 subject to its payment within the due dates under the relevant enactments.?” 2. It is not disputed that same issue was gone into by this Court in I.T.A No.325 of 2009 CIT v. M/s Lakhani India Ltd. on 16.11.2009 and decided against the revenue. 3. Accordingly, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE September 14, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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