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2021 (8) TMI 791 - AT - Income TaxRevision u/s 263 - belated employee s contribution to PF and ESIC funds - whether the disallowance is called in the case of delay in remittance of employee s contribution to PF and ESIC but paid within the due date for filing of the return of income is covered in favour of the appellant by the decision of Hon ble Jurisdictional High Court in the case of GhatgePatil Transports Ltd. 2014 (10) TMI 402 - BOMBAY HIGH COURT ? - HELD THAT - AO had not followed the CBDT Circular No.22/2015 dated 17.12.2015 which mandates the Assessing Officer to disallow the belated employee s contribution to PF and ESIC funds beyond the due dates under relevant statute. The reasoning of the ld. PCIT is against the settled position of law that the decision of the Hon ble Jurisdictional High Court or the Hon ble Supreme Court always overrides the Circular issued by the CBDT (supra). The CBDT is not competent to pronounce upon any point of law. Therefore the Assessing Officer is bound to follow the law declared by the Hon ble Supreme Court of India and the Jurisdictional High Courts. The law declared by the Hon ble Supreme Court is binding on the all the authorities u/s 141 of the Constitution of India. The Commissioner of Income Tax in exercise the powers vested u/s 263 of the Act cannot do something what the Assessing Officer himself cannot do. Thus the very premises on which revision was sought to be made by ld. PCIT had failed and resultant order has no legs to stand. It is salutary principle of law that once the foundation is removed the superstructure falls which is based maxim sublato fundamento cadit opus. Accordingly the impugned order of the ld. PCIT passed u/s 263 of the Act cannot be sustained under the law and is hereby quashed - Appeal filed by the assessee is allowed.
Issues:
Validity of order passed by ld. Pr. Commissioner of Income Tax-6, Pune u/s 263 of the Income Tax Act, 1961. Analysis: 1. The appellant challenged the validity of the order passed by the ld. Pr. Commissioner of Income Tax-6, Pune, under Section 263 of the Income Tax Act, 1961. The appellant raised grounds of appeal questioning the jurisdiction and legality of the order. 2. The appellant, a civil contractor company, filed its income tax return for the assessment year 2015-16. The Assessing Officer completed the assessment, making an addition on account of ROC charges. Subsequently, the ld. PCIT issued a show-cause notice under Section 263 concerning the employee's contribution to PF and ESIC paid beyond the due date. The appellant cited legal precedents to support the deduction of these payments. 3. The ld. PCIT, despite acknowledging legal precedents favoring the appellant, set aside the assessment order, citing a CBDT Circular and ongoing appeals. The appellant contended that the CBDT Circular cannot override decisions of the Supreme Court and High Courts, which establish the allowability of such deductions. 4. The main issue in the appeal was the validity of the ld. PCIT's assumption of jurisdiction under Section 263. The Tribunal noted that the issue of delayed remittance of employee contributions to PF and ESIC, paid within the due date for filing income tax returns, was settled in favor of the appellant by legal precedents. 5. The ld. PCIT's basis for revising the assessment order was the alleged non-compliance with a CBDT Circular. However, the Tribunal emphasized that decisions of higher courts prevail over circulars, and the Assessing Officer must adhere to legal precedents set by the Supreme Court and High Courts. 6. Ultimately, the Tribunal found that the ld. PCIT's reasoning was flawed, as it contradicted established legal principles. The order passed under Section 263 was deemed unsustainable, and the appeal by the assessee was allowed, quashing the impugned order. This detailed analysis highlights the grounds of appeal, the facts of the case, the legal arguments presented, and the Tribunal's reasoning in determining the validity of the ld. PCIT's order under Section 263 of the Income Tax Act, 1961.
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