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Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: Shri Waseem Ahmed & Shri Siddhartha Nautiyal
आदेश/ORDER PER BENCH:- This is an appeal filed by the assessee for A.Y. 2018-19 against the order of the National Faceless Appeal Centre (NFAC), Delhi dated 30-08- 2021, in DIN & Order No. ITBA/NFAC/S/250//2021-22/1035184955(1), in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
Page No 2 M/s. Atlas Metal Industries vs. ACIT
The assessee has taken the following grounds of appeal:-
“1) Ld. CIT(A) erred in law as well as on fact in upholding prima faice adjustment made u/s. 143(1) of the Act by DCIT, CPC being disallowance of Rs. 5,34,349/- u/s. 36(l)(va). In view of contradictory decisions of hon. High courts and hon. Tribunal said adjustment is highly debatable and outside the scope of section 143(1).”
The brief facts of the case are that the DCIT, CPC passed order under section 143(1) of the Act by assessing the total income at � 1,03,74,300/- thereby raising the demand of � 5,35,906/- by making additions in respect of late deposit of employee’s contribution to provident fund under section 36(1)(va) of the Act. In appeal, Ld. CIT(Appeals) dismissed the appeal of the assessee on the ground that the issue is directly covered against the assessee by the Honourable Gujarat High Court in the case of CIT v. Gujarat State Road transport Corporation (2014) 41 Taxman.com 100 (Gujarat). The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals).
Before us, the learned counsel for the assessee submitted that Ld. CIT(Appeals) erred in facts and in law in upholding the prima facie adjustment made under section 143(1) of the Act by the DCIT, CPC in view of contradictory decisions of various High Court and Tribunals, the said adjustment is highly debatable and therefore outside the scope of section 143(1) of the Act. In response, the Ld. DR relied on the order upholding the additions made by DCIT, CPC.
Page No 3 M/s. Atlas Metal Industries vs. ACIT
We have heard the rival contentions and perused the material on record We observe that the Ahmedabad Tribunal in the case of Diversified Services v. ITO in on identical facts has held that when any specific issue has been decided by the jurisdictional High Court, the Revenue authorities within its jurisdiction are bound to follow the decision, based on the principles of judicial hierarchy. In this case, the Ahmedabad ITAT held that when the issue with respect to deposit of employee’s Provident fund has been decided by the Gujarat High Court in the case of CIT v. Gujarat State Road transport Corporation (2014) 41 Taxman.com 100 (Gujarat), then the CPC can make prima facie adjustments under section 143(1) of the Act in respect of the same. While passing the order, the Ahmedabad ITAT made the following observations:
6. In view of the above discussion, we are of the considered view that in the instant set of facts the Ld. CIT(A) has not erred in facts and law in confirming the disallowance of late deposit of employees Provident fund contribution under section 36(1)(va) of the Act. The Supreme Court in the case of ACIT v. Saurashtra Kutch Stock Exchange Ltd[2008] 173 Taxman 322 (SC) has held that not following decision of the Supreme Court or the jurisdictional High Court would constitute a mistake apparent from record. Since, admittedly the jurisdictional High Court in case of Gujarat State Road Transport Corporation supra has directly ruled on this issue against the assessee and has held that employees' contribution to specified fund will not be allowed as deduction u/s.36(1)(va) if there is delay in deposit as per the due dates mentioned in the respective Page No 4 M/s. Atlas Metal Industries vs. ACIT
legislation, in our view, the Department is bound to follow the decision of the jurisdictional High Court. Perhaps, it would have been a different factual situation in case the jurisdictional High Court had decided the issue on late deposit of employee’s Provident fund in favour of the assessee or there would have been no jurisdictional High Court decision on this issue, in which case, in our view, the issue could have been debatable. However so far as the present facts are concerned, in our considered view, Ld. CIT(A) has not erred in facts and law in coming to the conclusion that disallowance made by the CPC u/s 143(1) of the I.T. Act on account of appellant's failure to pay the employee's contribution of PF/ESI of Rs.8,85,284/- within the prescribed due dates as per section 36(1)(va) is strictly in accordance with law.
In the result, the appeal of the assessee is dismissed.
5.1 Respectfully following the above decision of the Ahmedabad ITAT, we dismiss the appeal filed by the assessee.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 16-09-2022