SUZLON ENERGY LTD.,AHMEDABAD vs. THE DCIT, CIRCLE-4(1)(1), AHMEDABAD

PDF · subscribers
ITA 765/AHD/2018Status: DisposedITAT Ahmedabad27 June 2018AY 2014-152 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that delayed deposit of employees' contribution to PF/ESI is not deductible, following the jurisdictional High Court's decision. However, the AO was directed to verify if the payments were indeed delayed based on the actual payment date of salaries.

What were the facts?

The assessee challenged the CIT(A)'s confirmation of additions made by the AO for late payment of employees' contribution to PF/ESI. The additions were made under Section 36(1)(va) read with Section 2(24)(x) of the Income-tax Act.

What were the issues?

Whether delayed deposit of employees' contribution to PF/ESI is deductible, and how the 'due date' for such deposits should be determined.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD

ITA Nos. 764 & 765/Ahd/2018 Suzlon Energy Ltd vs. DCIT Assessment year: 2013-14 & 2014-15 Page 1 of 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD [Coram: Pramod Kumar, AM and Ms. Madhumita Roy, JM] ITA Nos. 764 & 765/Ahd/2018 Assessment Year: 2013-14 & 2014-15 Suzlon Energy Ltd ............…………......Appellant Suzlon-5, Shrimali Society, Nr. Shri Krishna Centre, Navrangpura, Ahmedabad-380015 [PAN : AADCS 0472 N] Vs. Dy. Commissioner of Income-tax ...........................Respondent Circle 4(1)(1), Ahmedabad Appearances by: Tushar Hemani for the Appellant Saurabh Singh for the Respondent Date of concluding the hearing : 22.06.2018 Date of pronouncing the order : 27.06.2018 O R D E R Per Pramod Kumar, AM:

1.

By way of these appeals, the assessee-appellant has challenged correctness of the order dated 14.02.2018 and 16.02.2018 passed by the by the CIT(A)-8, Ahmedabad in the matter of assessment under section 143(3) r.w.s. 144C of the Income-tax Act, 1961, for the assessment years 2013-14 & 2014-15.

2.

The solitary grievance of the assessee is that the learned CIT(A) has erred in confirming the addition of Rs.7,96,29,760/- for AY 2013-14 and Rs.10,74,54,105/- for AY 2014-15, which were added by the Assessing Officer with the aid of Section 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961, for the late payment of Employees’ Contribution to PF/ESI.

3.

Learned representatives fairly agree that the aforesaid issue is squarely covered against the assessee by Hon’ble jurisdictional High Court’s judgment in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.), wherein it is categorically held that in the case of delayed deposit of employees’ contribution to PF, the same will not be deductable in computing income under section 28 of the Act. The law so laid down by the Hon’ble jurisdictional High Court is binding on us. The mere fact that an appeal against the said decision is pending before the Hon’ble Supreme Court does not dilute binding nature of this judicial precedent. As regard dismissal of SLP in the case of Rajasthan State Beverages Corporation Ltd (2017) 84 taxmann.com 185 (SC), it is only elementary that when a SLP is dismissed by a non-speaking order, it does not constitute a law declared by Hon’ble Supreme Court, and as such, it is not binding under Article 141 of the Constitution of India. The authority, for this proposition, is contained in a series of judgments of Hon’ble Supreme Court, including, inter alia, in the cases of State of

ITA Nos. 764 & 765/Ahd/2018 Suzlon Energy Ltd vs. DCIT Assessment year: 2013-14 & 2014-15 Page 2 of 2 Manipur vs. Thingujam Brojen Meetai, (1996) 9 SCC 29; Om Prakash Gargi v. State of Punjab, (1996) 11 SCC 399 and Sun Export Corpn v. Collector of Customs, AIR 1997 SC 2658. We, therefore, see no legally sustainable merit in the case of the assessee and, respectfully following the judgment of Hon’ble jurisdictional High Court in the case of Gujarat State Road Transport Corporation (supra), dismiss the grievance of the assessee in principle. We may, however, add that a co-ordinate bench of this Tribunal, in the case of Rajjratna Metal Industries Ltd Vs. ACIT (ITA No.940/Ahd/2015; order dated 22.09.2017), has observed as follows:-

“3. Assessee's latter substantive ground challenges correctness of both the lower authorities' action disallowing/adding a sum of Rs.3,85,810/- u/s. 36(1)(va) r.w.s. 2(24) of the Act on account late payment of employees' contribution to PF & ESI in question. There is no dispute that hon'ble jurisdictional high court's decision in CIT vs. Gujarat State Road Transport Corporation (2014) 366 ITR 170 (Guj) upholds such a disallowance in principle. The assessee's case however is that relevant due date has to be seen not from the relevant month of salary but the one pertaining to its payment. He then files a computation chart indicating it to have paid above employees' PF/ESI contributions on 22.05.2009 and 28.05.2009 as against the due dates thereof following on 20.06.2009. The Revenue fails to dispute this factual position. We therefore quote this tribunal's co-ordinate bench decision in Kanoi paper & Industries Ltd. vs. ACIT 75 TTJ 448 that the relevant date in such case is that of month of the actual payment of wages/salaries. We therefore rely on the above co-ordinate bench decision and direct the Assessing Officer to delete the impugned disallowance as well.” 4. In effect thus while any delayed deposit of PF/ESI is to be disallowed, in terms of Hon’ble Gujarat High Court’s judgment in the case of Gujarat State Road Transport Corporation (supra), the question as to whether there is a delay or not may be decided by the Assessing Officer in the light of above observations by the co- ordinate bench. The assessee will get relief, if found admissible, on that basis. 5. In the result, appeals of the assessee are allowed for statistical purposes. Pronounced in the open court today on the 27th June, 2018

Sd/- Sd/-

Ms. Madhumita Roy Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 27th day of June, 2018 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File

By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad

More judgments on Section 36(1)(va)

All 6,054 judgments and leading authorities on Section 36(1)(va) →

Recent GST High Court judgments

Search GST case law →