M/S. RAAJRATNA METAL INDUSTRIES LTD.,AHMEDABAD vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-3(1)(2), AHMEDABAD

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ITA 1268/AHD/2017Status: DisposedITAT Ahmedabad05 April 2018AY 2012-132 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal, following the jurisdictional High Court's decision, held that delayed deposit of employees' contribution to PF/ESI is not deductible. However, it remitted the matter for verification of payments made within the permissible time limit.

What were the facts?

The assessee challenged the disallowance of Rs. 26,10,704/-, added by the Assessing Officer for late payment of Employees' Contribution to PF/ESI. The CIT(A) had confirmed this disallowance.

What were the issues?

Whether disallowance of employees' contribution to PF/ESI paid after the due date is justified. Whether payments made within the permissible time limit were wrongly disallowed.

Which sections of the Income-tax Act were involved?

Section 36(1)(va),Section 2(24)(x),Section 143(3),Section 144C

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

IT(TP)A No. 1268/Ahd /2017 Raajratna Metal Industries Ltd Vs. DCIT Assessment year: 2012-13 Page 1 of 2 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “A” BENCH, AHMEDABAD [Coram: Pramod Kumar AM and Rajpal Yadav JM] IT(TP)A No. 1268/Ahd/2017 Assessment Year: 2012-13 Raajratna Metal Industries Limited ............…………......Appellant C/o. Mehta Lodha &Co., Chartered Accountants 105, Sakar-I, Ashram Road Ahmedabad - 380009 [PAN : AAACR 9980 M] Vs. Dy. Commissioner of Income-tax ...........................Respondent Circle 3(1)(2) Ahmedabad

Appearances by:

PD Shah for the Appellant Saurabh Singh for the Respondent Date of concluding the hearing : 15.03.2018 Date of pronouncing the order : 05.04.2018

O R D E R Per Bench :

1.

By way of this appeal, the assessee-appellant has challenged correctness of the order dated 3rd March, 2017 passed by the by the CIT(A)-9, Ahmedabad, in the matter of assessment under section 143(3) r.w.s. 144C of the Income-tax Act, 1961, for the assessment year 2012-13.

2.

The solitary grievance of the assessee is that the learned CIT(A) has erred in confirming the disallowance of Rs.26,10,704/-, which was 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/ESI, 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 (supra), it is only elementary that when a SLP is dismissed by a non-

IT(TP)A No. 1268/Ahd /2017 Raajratna Metal Industries Ltd Vs. DCIT Assessment year: 2012-13 Page 2 of 2 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 Manipur vs. ThingujamBrojenMeetai, (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.

4.

Learned counsel has, however, filed a detailed chart to justify his contention that a large number of payments so made are well within the permissible time limit, and yet these payments are disallowed on the ground that these payments are delayed payments. Since this aspect of the matter has not been raised before any of the authorities below, we deem it fit and proper to remit the matter to the file of the CIT(A) for limited verification of this plea. If the payments are indeed made in time, to that limited extent, disallowance will have to be deleted.

5.

In the result, appeal of the assessee is allowed for statistical purposes in the terms indicated above. Pronounced in the open court today on the 5th April, 2018

Sd/- Sd/-

Rajpal Yadav Pramod Kumar (Judicial Member) (Accountant Member) Ahmedabad, the 5th day of April, 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 1. Date of dictation: ................covered matter...04.04.2018... 2. Date on which the typed draft is placed before the Dictating Member: ....... 04.04.2018.......... 3. Date on which the approved draft comes to the Sr. P.S./P.S.: …..04.04.2018..... . 4. Date on which the fair order is placed before the Dictating Member for Pronouncement: .... 05.04.2018... 5. Date on which the file goes to the Bench Clerk : .. 05.04.2018.... 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: …… 8. Date of Despatch of the Order: ………………......

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