2018 (3) TMI 1847 - AT - Income Tax

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

Sequel Logistics Pvt Ltd Versus Dy. Commissioner of Income-tax

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 ... Addition u/s 36(1)(va) for the late payment of Employees Contribution to PF/ESI - HELD THAT:- Issue is squarely covered against the assessee in the case of CIT vs. Gujarat State Road Transport Corporation, [2014 (1) TMI 502 - GUJARAT HIGH COURT] 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 (supra), it is only elementary that when a SLP is dismissed by a nonspeaking 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. 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. 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.