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EMPLOYEES CONTRIBUTIONS TO FUNDS ground realities must be recognized by the Legislators, Judiciary , Governments and authorities to avoid un-necessary litigation. |
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EMPLOYEES CONTRIBUTIONS TO FUNDS ground realities must be recognized by the Legislators, Judiciary , Governments and authorities to avoid un-necessary litigation. |
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Relevant provisions: S.2.24.x, 36.1.va and 43B of IT Act. Recent judgment of Tribunal: Judgments referred on the issue by Tribunal:
Judgments not referred to / mentioned by Tribunal: There are some old judgments of the Supreme Court, on the same issue which are not cited, but observations have been made by Ld. CIT(A) and honorable Tribunal about such judgments, however, it is not known exactly which judgments were considered by them. From order of CIT(A) as reproduced by ITAT in its order we find Ld. CIT(A) has in paragraph 9.3 mentioned as follows: 9.3 Further, in view of the above judgements of the Hon'ble Supreme Court which has been subsequently followed by the Jurisdictional High Court, I find that there is no justification in the action of the AO in making a disallowance on account of delay in depositon of ESI & PF. Honorable Tribunal has taken note of judgments of the Supreme Court in following terms in paragraph 4.4 of its order: “It is also pertinent to mention that Hon'ble Supreme Court has passed the judgment in favour of the assessee on the issue in question”. The following judgments and orders of honorable Supreme Court are directly relevant on the issue: 2007 (3) TMI 346 - SC ORDER Other Citation: 213 CTR 268, [2009] 313 ITR (St.) 1 CIT VERSUS VINAY CEMENT LTD. read with : 2006 (6) TMI 71 - GAUHATI HIGH COURT Other Citation: [2006] 284 ITR 619 COMMISSIONER OF INCOME-TAX VERSUS GEORGE WILLIAMSON (ASSAM) LIMITED. Commissioner of Income Tax Versus M/s. Rajasthan State Ganganagar Sugar Mills Ltd. 2016 (5) TMI 1326 - RAJASTHAN HIGH COURT Other Citation: [2017] 393 ITR Commissioner of Income Tax Versus M/s. Alom Extrusions Limited 2009 (11) TMI 27 - SUPREME COURT also reported as [2009] 319 ITR 306 (SC). The revenue is not considering this judgment as binding because there was no specific question about employees contribution. However, honorable Supreme Court has considered the same in its judgment, and even if it be considered as a matter incidental to appeal about contribution of assesse, as employer, the observations and order about employees contribution is also binding all over India. It is well settled that even obiter dicta, in a judgment of the Supreme Court is binding on all Courts below. As we find that the SLP of revenue was dismissed against judgments of Rajasthan High Court , it can be presumed that those decisions being directly on S. 24, 36.1.va and 43B in relation to deductions from salary and wages of employees have been considered by the Tribunal. We also notice from reported judgments that many High Courts (except a few like Gujarat High Court, Karnataka High Court and Madras High Court) have decided issue in favor of assesse and revenue has not challenged many of them. For this reason also we can say that revenue is indulging into litigation un-necessarily.
By: CA DEV KUMAR KOTHARI - October 16, 2019
Discussions to this article
Today I was reading an article in the internet wherein the case was like this. The Higher authority has passed an order of refund with interest. The authority lower in designation was to execute the order. Instead of doing so, the authority assessed the case by himself and he hold the interest on refund component. The case went into litigation. It was said that to this is one of the reason behind the case to pile up. The lower authority has to bind by the decision of the higher authority. This is reduce the time taken in concluding the case.
Please read "is" as "will".
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