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2019 (2) TMI 1789

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..... contribution to the fund arises. This Court held that the expression “within fifteen days of the close of every month” therefore, must be interpreted as having reference to the close of the month, for which, the wages are required to be paid with corresponding duty to deduct employee's contribution and to deposit the same in the fund. In such circumstances referred to above, the finding recorded by the Tribunal that if such wages are paid for the following month, the liability to deposit the employee's contribution to the fund gets differed by another month is not the correct statement of law. - Decided in favour of the Revenue and against the assessee. - R/TAX APPEAL NO. 860 of 2019 - Dated:- 11-2-2019 - HONOURABLE MR.JUSTICE J.B.PARDIWALA And HONOURABLE MR. JUSTICE BHARGAV D. KARIA MRS MAUNA M BHATT FOR THE APPELLANT MR TUSHAR HEMANI SENIOR ADVOCATE WITH MS ADITI SHETH WITH MS VAIBHAVI K PARIKH ADVOCATES FOR THE OPPONENT ORDER ( Per : Honourable Mr. Justice J. B. Pardiwala ) 1 This Tax Appeal under Section 260A of the Income Tax Act, 1961 [for short, 'the Act, 1961'] is at the instance of the Revenue and is directed against the order passed by the Inc .....

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..... that the Ld. Tribunal pleased lo direct the AO to decide whether there was any delay or not in making such payment by the assessee. It has further observed that any delay deposit of PF/ESIC is to be disallowed in terms of the Hon ble Gujarat High Court judgment as cited above. The relevant portion of the said judgment is as follows:. 3. Learned representatives fairly agree that the aforesaid issue is squarely covered against the assessee by Hon'ble jurisdictional High Court's judgment in the case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.), wherein it is categorically held that in the case of delayed deposit of employees contribution to PF, the same will not deductible 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 befoe 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 (2017) 84 taxmann.com 185 (SC), it is only elementary that when a SLP is dismissed by a nonspeaking order, .....

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..... or not may be decided by the Assessing Officer in the light of above observations by the coordinate bench. The assessee will get relief, if found admissible, on that basis. 5. In the result, appeals of the assessee are allowed for statistical purposes. 5 The Revenue being dissatisfied with the order passed by the Appellate Tribunal is here before this Court with the present appeal. 6 The substantial question of law as raised by the Revenue for our consideration is no longer res integra, more particularly, in view of the decision of this Court dated 15th October 2018 in the case of M/s Checkmate Facility and Electronic Solutions Pvt Ltd vs. Deputy Commissioner of Income Tax Circle 1 rendered in Tax Appeal No.1256 of 2018. We quote the entire judgement delivered by the Coordinate Bench of this Court as follows: 1. Appellant-assessee has challenged the judgment of the Income Tax Appellate Tribunal dated 22.03.2018. Following questions are presented for our consideration: 1. Whether on facts and in law, the Income Tax Appellate Tribunal is right in confirming disallowance of ₹ 1,16,87,091/u/ s 2(24)(x) r.w.s. 36(1)(va) for delay in payment of employee s contribution to PF and ES .....

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..... aneous Provisions Act, 1952, reference to the time limit for depositing the contributions within 15 days of close of the month must be to the month in which the salary payment is made. For example, therefore if the salary payment for the month of June is made on 5th July, the employer would have time upto 15th of August for depositing the employee s contribution of provident fund. Looking from this angle, there was no delay or default on the part of the present assessee. 4. In terms of section 36(1)(va) of the Act, any sum received by the assessee from any of his employees to which the provisions of section 2(24)(x) applies, would be deducted as long as such sum is credited by the assessee to the employee s account in the relevant funds on or before due date. Explanation to the said subsection provides that for the purposeof the said clause, due date means a date by which the assessee is required as an employer to credit an employee s contribution to the account in which relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise. Section 38 of the Employees Provident Funds and Miscellaneous Provisi .....

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..... he aforesaid decision is that Section 38 of the Employees Provident Funds and Miscellaneous Provisions Act, 1952 makes it obligatory for the employer before paying him his wages to deduct the employee's contribution along with the employer's own contribution as fixed by Government. The employer is further obliged to pay the same within fifteen days of the close of every month pay i.e. such contribution and administrative charges. The reference to fifteen days of the close of the month must be in relation to month during which the payment of wages is to be made and corresponding liability to deduct employee's contribution to the fund arises. This Court held that the expression within fifteen days of the close of every month therefore, must be interpreted as having reference to the close of the month, for which, the wages are required to be paid with corresponding duty to deduct employee's contribution and to deposit the same in the fund. 8 In such circumstances referred to above, the finding recorded by the Tribunal that if such wages are paid for the following month, the liability to deposit the employee's contribution to the fund gets differed by another month .....

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