TMI Blog2022 (4) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... t against the order of the Hon'ble Gujarat High Court, in the case of Gujarat State Road Transport Corporation (supra), the SLP has been filed by the assessee, which has not been adjudicated yet therefore we are of the view that the issue may be remitted back to the file of the Ld. CIT(A) to decide the matter after taking into account the judgment of the Hon'ble Supreme Court as and when will be passed by the Hon'ble Supreme Court. Therefore these appeals at this stage are dismissed. However, if the Supreme Court reverses the judgment in the case of the Hon`ble Gujarat High Court in the case of CIT vs. GSRTC [Supra], it would be open for the assessees to revive these appeals by filing an application for such purpose within three months from the date of the judgment. Appeals filed by the assessee, are allowed for statistical purposes. - ITA Nos. 147 And 234/SRT/2021 And ITA No. 150/SRT/2021 And ITA No. 160/SRT/2021 And ITA Nos. 201 And 202/SRT/2021 And ITA No. 224 And 225/SRT/2021 And ITA No. 226/SRT/2021 And ITA No. 236/SRT/2021 - - - Dated:- 31-3-2022 - Shri Pawan Singh, JM And Dr. A. L. Saini, AM For the Assessee : Shri Rajesh Upadhyay, AR, Ms Richa Tosniw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the delay in filing the appeal before him. We have gone through the petition for condonation of delay and note that reasons given in the affidavit for condonation of delay were convincing and these reasons would constitute reasonable and sufficient cause for the delay in filing this appeal. Therefore, we direct the ld CIT(A) to condone the delay and admit assessee`s appeal for adjudication on merits. 5. The facts of the case which can be stated quite shortly are as follows. In all these ten appeals, the solitary issue involved is that assessees have not deposited employees contribution to provident fund and ESI within the time limit allowed under the Act. Therefore, Assessing Officer, DCIT, CPC Bengaluru, while passing order under section 143(1) of the Income Tax Act, 1961, added an amount of ₹ 11,83,960/- on account of late deposit of employees contribution to PF under section 36(1)(va) of Income Tax Act, 1961. 6. Aggrieved by the order of the Assessing Officer, DCIT, CPC, Bengaluru (hereinafter referred to as the AO ), the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the addition made by the Assessing Officer under section 143(1) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report. The Audit report indicates details of contribution received from employees for various funds as referred to in section 36(1)(v)(a). It gives the details of the due date of payment and actual date of payment to the concerned authorities. Since it was clear that employee's contribution to Provident fund have been paid beyond the due date specified, the provisions of sec 36(1)(v)(a) r.w.s. 2(24)(x) are attracted leading to the disallowance of the sum to the extent not credited to the employee's account on or before the due date stipulated in the respective PF Act and ESI Act. 6.2.5 Thus the AO is correct in making the said adjustment under either of the Section 143(1)(a)(ii) or 143(1)(a)(iv), which is apparent from the information contained in the tax audit report. In view of the above discussion, I find that the adjustment has correctly been made under section 143(1)(a) of the Income Tax Act. Hence, no relief can be given to the appellant in respect of the above adjustment made under section 143(1) of the Income Tax Act. Thus, this ground of the Appellant fails and is hence Dismissed. 7. Aggrieved, the assessee is in further appeal before us. 8. Learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made to the provisions of section 36(1)(va) by inserting Explanation 2 to provide that section 43B of the Act shall not apply for determining due date under this clause. However, this amendment is only prospective in nature and is applicable w.e.f 01.04.2021. As such, no disallowance of employee's contribution to provident fund can be made for the preceding years. In support of the contention that this amendment is prospective in nature, reliance is placed on following case laws:- (i) Flying Fabrication - 133 taxmann.com 84 (Del-trib) (ii) Gopalakrishna Aswini Kumar - ITA No. 359/Bang/21 dated 13.10.21 (iii) Mavinahalli Shivananjappa Vijay Kumar, - ITA No. 596- 597/Bang/21 dated 13.12.21 (iv) M/s. Technocon Constructions Infrastructure Private Limited vs Dy. CIT- (ITA No.670/Bang/2021 : Asst.Year 2019-20) Thirdly, it is to state that in the intimation to be issued under section 143(1) of the Act, only the specified adjustments can be carried out i.e. only the adjustments listed in clauses (i) to (vi) of section 143(1)(a) of the IT Act can be carried out. It is evident on perusal of these clauses that no adjustment can be done in respect of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition then prevailing, additional Tax under section 143(1A) could not be levied on subsequent inclusion of such receipt by retrospective amendment of section 28 of the Act. Thus, even when the amendment is made on retrospective basis, the Honorable Supreme Court has clearly held that no adjustment under section 143(1) of the Act should be made. It is held by the Hon ble Supreme Court in the case of Balram vs.Volkart Brother 82 ITR 50 (SC), that: The Income- tax Officer was not justified in thinking that on that question there can be no two opinions. It was not open to the Income-tax Officer to go into the true scope of the relevant provisions of the Act in a proceeding under section 154 of the Income-Tax Act, 1961 . The explanatory statement in respect of substitution of section 143(1) by the Finance Act, 2008 is as under: Correction of arithmetical mistakes and adjustment of incorrect claim under section 143(1) through Centralised Processing of Returns Generally, tax administrations across countries adopt a two-stage procedure of assessment as part of risk management strategy. In the first stage, all tax returns are processed to correct arithm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect claim is apparent from any information in the return of income. Therefore, ld DR contended that Assessing Officer can disallow such incorrect claims under section 143(1) (a) (ii) of the Act. The ld. DR argued that judgments referred by the Learned Counsel, in respect of section 143(1) of the Act, are distinguishable on facts and these judgments have not considered the correct interpretation of section 143(1)(a) of the Act. Therefore, ld. DR contended that the order passed by the Assessing Officer under section 143(1) does not contain any infirmity and therefore same should be upheld. 11. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that section 36(1)(va) of the Act provides that any sum received by the assessee from any of his employees to which the provisions of sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee`s account in the relevant fund on or before the du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals are allowed. 12. Therefore, as per the above, judgment of the Hon'ble jurisdictional High Court in the case of Gujarat State Road Transport Corporation (GSRTC), the claim of the assessee is not allowable. 13. We note that Hon`ble Jurisdictional High Court of Gujarat in the case of Salasar Laminates Ltd. Vs. Dy. CIT (Tax Appeal No. 1186 of 2018), has granted liberty to the assessee that if the Supreme Court reverse the judgment in the case of GSRTC, it would be open for the assessee to revive the appeal. The findings of the Hon`ble Court is reproduced below: This Appeal is filed by the assessee to challenge the judgment of the Income Tax Appellate Tribunal, Ahmedabad { Tribunal for short} dated 22nd March 2018. The issue pertains to Assessment Year 2013-14 and the sole question raised by the assessee in this appeal concerns deductibility of a sum of ₹ 20,34,916/= which was the employees contribution towards Provident Fund, ESI, etc. It appears that the assessee did deposit such amount of contribution towards PF ESIC accounts, however, missed the deadline prescribed in the statutes for such purpose. On account of this, the Revenue did not permit deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dinate Bench of ITAT Surat, in the case of Puja Chemicals in ITA No.161 162/SRT/2021. The findings of the Tribunal is as follows: 5.We have heard both the parties and perused the material available on record. We note that the issue involved in these four appeals are covered against the assessee, as the assessee has not deposited Employees Provident Fund (EPF) with the prescribed authority within stipulated time, therefore as per the judgment of the Hon'ble Gujarat High Court in the case of Gujarat State Road Transport Company (supra), the issue had already been decided by the Hon'ble Court against the assessee. However, we note that jurisdiction ITAT, Ahmedabad in the case of M/s Unicorn Remedies Pvt. Ltd. in ITA Nos. 3058/AHD/2014 for AY.2011-12 and 2599/AHD/2016 for AY.2012-13, order dated 30.01.2019 wherein the similar issue has been remitted back to the file of the Ld. CIT(A) to decide the matter after taking into account the outcome of the judgment of the Hon'ble Supreme Court. The findings of the Tribunal are reproduced below: 14. This issue is already against the appellant for late deposit of Employees Provident Fund with the authority by the judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sum from the income of the assessee. Such disallowance thereupon became the subject matter of appeal before the Tribunal. The Tribunal dismissed the ground, relying upon the judgment of this Court in the case of Commissioner of Income-tax vs. Gujarat State Road Transport Corporation Limited, reported in 366ITR 170 [Gujarat]. Counsel for the appellant did not dispute that the issue on hands is squarely covered by this Court in the case of CIT v. GSRTC [Supra]. He, however, submitted that the appeal is pending against the judgment of the High Court before the Supreme Court and SLP has been granted. The amount involved is not very large and it would be extremely expensive for the assessee to carry this in appeal before the Supreme Court. He, therefore, suggested that the benefit of this judgment of the Supreme Court may be made available to the assessee; as and when rendered and in case, the judgment of the High Court is reversed. Two clear ways are possible to enable the appellant- assessee to get benefit of the judgment of the Supreme Court, in case the High Court judgment is reversed. One is to dismiss this C/TAXAP/1186/2018 ORDER appeal and allow the assessee to approach the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of the High Court are binding on the subordinate Courts and authorities or Tribunals under its superintendence throughout the territories in relation to which it exercises jurisdiction. It does not extent beyond its territorial jurisdiction. (c) The position in regard to binding nature of the decisions of a High Court on different Benches of the same Court, may be summed up as follows : (i) A Single Judge of a High Court is bound by the decision of another Single Judge or a Division Bench of the same High Court. It would be judicial impropriety to ignore that decision. Judicial comity demands that a binding decision to which his attention had been drawn should neither be ignored nor overlooked. If he does not find himself in agreement with the same, the proper procedure is to refer the binding decision and direct the papers to be placed before the Chief Justice to enable him to constitute a larger Bench to examine the question [see Food Corporation of India vs. Yadav Engineer Contractor AIR 1982 SC 1302]. (ii) A Division Bench of a High Court should follow the decision of another Division Bench of equal strength or a Full Bench of the same High Court. If one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial decisions. As per the doctrine of precedent, all lower Courts, Tribunals and authorities exercising judicial or quasi-judicial functions are bound by the decisions of the High Court within whose territorial jurisdiction these Courts, Tribunals authorities functions. In the case of State of Orissa Ors. v, M.D. Illyos, [2006] 1 SCC 275 the Hon`ble Supreme Court held that a decision is a precedent on its own facts and that for a judgment to be a precedent it must contain the three basic postulates: (i)A finding of material facts, direct and inferential. An inferential finding of fact is the inference which the Judge draws from the direct or perceptible facts; (ii) statements of the principles of law applicable to the legal problems disclosed by the facts; and (iii) judgment based on the individual effect of the above. In the case of CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297 (SC), the Hon`ble Supreme Court held that it is neither desirable nor permissible to pick out a word or a sentence from the judgment, divorced from the context of the question under consideration and treat it to be the complete law . The judgment must be read as a whole and observations from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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