Appeal Dismissed for Late PF/ESI Payment, Non-Deductible under Income Tax Act

The Tribunal upheld the decision of the CIT(A)-8, Ahmedabad, dismissing the appeal of the assessee challenging the addition made for late payment of Employees' Contribution to PF/ESI. Relying on the High Court's precedent, the Tribunal held that delayed deposits are not deductible under section 28 of the Income-tax Act. The dismissal of SLP in another case was cited to emphasize the non-binding nature of nonspeaking orders. The Tribunal emphasized that decisions of non-jurisdictional courts cannot override those of the jurisdictional High Court. Consequently, the appeal was dismissed based on the binding precedent set by the High Court.

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Issues:
Challenge to correctness of order dated 18th October, 2016 passed by CIT(A)-8, Ahmedabad regarding assessment under section 143(3) of the Income-tax Act, 1961 for the assessment year 2012-13.

Analysis:
The appellant challenged the order passed by CIT(A)-8, Ahmedabad, regarding the addition made by the Assessing Officer under Section 36(1)(va) of the Income-tax Act, 1961 for late payment of Employees Contribution to PF/ESI. The grievance of the assessee was that the CIT(A) erred in confirming the addition of Rs. 8,03,104 out of Rs. 15,86,762. The representatives agreed that the issue was covered against the assessee by the High Court's judgment in the case of CIT vs. Gujarat State Road Transport Corporation. The High Court held that delayed deposit of employees' contribution to PF would not be deductible in computing income under section 28 of the Act. The Tribunal, following the binding nature of this judicial precedent, dismissed the grievance of the assessee. The dismissal of SLP in another case was also discussed, emphasizing that a nonspeaking order does not constitute a law declared by the Supreme Court and is not binding. The Tribunal noted that decisions of non-jurisdictional High Courts and co-ordinate benches cannot override views expressed by the jurisdictional High Court. Therefore, the appeal of the assessee was dismissed based on the precedent set by the High Court.

In conclusion, the Tribunal upheld the decision of the CIT(A)-8, Ahmedabad, and dismissed the appeal of the assessee. The judgment was pronounced on 22nd March, 2018, in the open court.

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