Appeal dismissed on late PF/ESI payments under Income-tax Act 1961

The appeal challenging the CIT(A)-1, Vadodara's order on the assessment under section 143(3) of the Income-tax Act, 1961 for the assessment year 2013-14 was dismissed. The additions made by the Assessing Officer for late payment of Employees' Contribution to PF/ESI were confirmed. The Tribunal upheld the decision citing the precedent set by the High Court in the case of CIT vs. Gujarat State Road Transport Corporation, where delayed deposits of employees' contributions to PF were not deductible in computing income under section 28 of the Act. The appeal was dismissed on 22nd March, 2018.

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Issues:
Challenge to correctness of the order dated 20th December, 2016 passed by the CIT(A)-1, Vadodara in the matter of assessment under section 143(3) of the Income-tax Act, 1961, for the assessment year 2013-14.

Analysis:
The appeal challenged the correctness of the order passed by the CIT(A)-1, Vadodara regarding the assessment under section 143(3) of the Income-tax Act, 1961 for the assessment year 2013-14. The primary grievance of the assessee was the confirmation of additions amounting to Rs. 1,01,72,543/- (PF) and Rs. 15,14,548/- (ESI) by the CIT(A). These additions were made by the Assessing Officer under Section 36(1)(va) r.w.s. 2(24)(x) of the Income-tax Act, 1961, due to late payment of Employees' Contribution to PF/ESI.

The representatives of both parties agreed that the issue was decisively settled against the assessee by the judgment of the jurisdictional High Court in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.). The High Court held that delayed deposits of employees' contributions to PF would not be deductible in computing income under section 28 of the Act. This legal precedent was deemed binding. The dismissal of SLP in the case of Rajasthan State Beverages Corporation Ltd was also discussed, highlighting that a non-speaking order of dismissal does not constitute a binding law declared by the Supreme Court.

The Tribunal found no legally sustainable merit in the case of the assessee and, in accordance with the judgment of the jurisdictional High Court in the case of Gujarat State Road Transport Corporation, the appeal of the assessee was dismissed. The decision was pronounced in open court on 22nd March, 2018.

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