26 March 2011
Sir , i have come across a situation in the course of audit i.e., payment of PF (employer's and employees) contribution by employer for Jan'11 was paid on 21-2-2011,because 20-2-2011 was sunday.
My query is that, what will be day for a payment if the due date is an holiday(i.e will it be on the following day or previous day of the holiday, the holiday is sunday.).Will this late payment be allowed under PF Act and the same will be allowed as a deduction under income tax act?
26 March 2011
Pf Deduction is allowed under income tax now even payment is made after due date............................recent case made a judgment about deduction of PF CIT VS AIMIL LIMITED
CIT VS. COURT)
(110.3 KiB, 127 DLs)
AIMIL
LIMITED
(DELHI
HIGH
EVEN EMPLOYEES’ CONTRIBUTION TO PF PAID BEFORE DUE DATE OF FILING ROI IS ALLOWABLE U/S 43B
S. 2 (24) (x) provides that amounts received by an assessee from
employees towards PF contributions etc shall be “income”. S. 36 (1)
(va) provides that if such sums are contributed to the employees
account in the relevant fund on or before the due date specified in
the PF etc legislation, the assessee shall be entitled to a deduction.
The second Proviso to s. 43B (b) provided that any sum paid by the
assessee as an employer by way of contribution to any provident etc
fund shall be allowed as a deduction only if paid on or before the due
date specified in 36(1)(va). After the omission of the second Proviso
w.e.f 1.4.2004, the deduction is allowable under the first Proviso if the
payment is made on or before the due date for furnishing the return
of income. The High Court had to consider whether the benefit of s.
43B can be extended to employees’ contribution as well which are paid
after the due date under the PF law but before the due date for filing
the return. HELD deciding in favour of the assessee:
(i)
Though the revenue has argued that a distinction is to be made
between
contribution” and that employees’ contribution being in the
nature of trust money in the hands of the assessee cannot be
allowed as a deduction if not paid on or before the due date
“employers’
contribution”
and
“employees’
specified in the PF etc law, the scheme of the Act is that
employees’ contribution is treated as income u/s 2 (24) (x) on
receipt by the assessee and allowed as a deduction u/s 36 (1)
(va) on making deposit with the concerned authorities. S. 43B
(b) stipulates that such deduction would be permissible only on
actual payment;
(ii)
The question as to when actual payment should be made is
answered by Vinay Cements 213 CTR 268 where the deletion of
the second Proviso to s. 43B w.e.f 1.4.2004 was held applicable
to earlier years as well. As the deletion of the 2nd Proviso is
retrospective, the case has to be governed by the first Proviso.
If the employees’ contribution is not deposited by the due date
prescribed under the relevant Acts and is deposited late, the
employer not only pays interest on delayed payment but can
incur penalties also, for which specific provisions are made in
the Provident Fund Act as well as the ESI Act. Therefore, the Act
permits the employer to make the deposit with some delays,
subject to the aforesaid consequences. Insofar as the Income-
tax Act is concerned, the assessee can get the benefit if the
actual payment is made before the return is filed, as per the
principle laid down in Vinay Cement.
Source
Decided By: High Court of Delhi, In the case of: Commissioner of
Income Tax VERSUS AIMIL Limited, Appeal No.: ITA No. 1063/2008,
Reserved on: December 04, 2009, Pronounced on: December 23,
2009
EMPLOYEES’
SOCIAL
BEFORE THE DUE DATE OF FILING
RETURN OF INCOME IS ALLOWABLE
CONTRIBUTIONS
SECURITY
SCHEMES
TO
PAID
Mar 20, 2010 Income Tax Case Laws
CIT Vs Aimil Ltd [2010-TIOL-125-HC-Del-IT]
Income tax – Sec 36(1)(va), 43B – Assessee deposits employer’s
contribution as well as employees’ contribution to PF and ESI
after due date – AO disallows and CIT(A) agrees with him –
Assessee files application u/s 154 for rectification of mistake and
CIT(A) deletes the addition as assessee had made payments
before the due date – Tribunal dismisses Revenue’s appeal –
held, if the employer deposits its contribution late it pays interest
and penalty under the PF Act – as long as it is deposited before
filing the return it is allowable – Assessee’s appeal allowed:DELHI
HIGH COURT;
Background and facts of the case:-Under the Indian Tax Law
(ITL), any sum received by a taxpayer from its employees as
contributions to any of the SSS is treated as income of the
taxpayer. The taxpayer is eligible for deduction of such sums if it
deposits them to the relevant SSS before the statutory due date.
Under
contributions are allowed as deduction on actual payment made
on or before the due date of filing ROl. Prior to tax year 2003-04,
the employer’s contributions were also required to be paid before
the statutory due date for being allowed as deduction. However,
in view of the amendment by Finance Act 2003, effective from
tax year 2003-04, these sums are currently allowed as deduction
if paid on or before the due date of filing ROl.
a
separate
provision
of
the
ITL,
the
employer’s
Dismissing the Special Leave Petition (SLP) of the Tax Authority
in the case of CIT v Vinay Cement Ltd (213 CTR 268)
Cement ruling), the Supreme Court (SC) held, by a short
decision, that the employer’s contributions paid before the due
date of filing ROl are allowable even prior to tax year 2003-04
(Refer Note – 1).
(Vinay
The present ruling relates to tax year 2002-03 i.e. before the
amendment by Finance Act 2003. The Taxpayer deposited its
employees’ and employer’s contributions after the statutory due
date but before the due date of filing ROl. The Tax Authority
denied the deduction in respect of both the contributions.
The Taxpayer appealed to the first appellate authority who
deleted
Income Tax Appellate Tribunal (ITAT) which dismissed the Tax
Authority’s appeal.
the
addition.
The
Tax
Authority
appealed
to
the
Being aggrieved by the ITAT’s order, the Tax Authority appealed
further to the HC. The question of law admitted by the HC was
restricted to deductibility of the employees’ contributions.
Contentions of the Tax Authority:-A distinction should be
made between payments representing the employees’ and the
employer’s
recovered from salaries/wages and, thus, represent money held
in trust by the taxpayers for the employees. For this reason, the
ITL provides for a rigorous condition for grant of deduction of
such amounts and requires that such sums should be paid on or
before the statutory due date.
contributions.
The
employees’
contributions
are
In the present case, since the Taxpayer did not pay the
employees’ contributions before the statutory due date, it is not
entitled to deduction of the said sums.
The Vinay Cements ruling is relevant in the context of the
employer’s contributions alone and cannot be applied to the
employees’ contribution.
Contentions of the Taxpayer :- In view of the Vinay Cements
ruling, the employees’ contributions are also allowable as
deduction if paid on or before the due date of filing ROl, although
such payments are paid after the statutory due date.
Ruling of the HC:- The scheme of the ITL, insofar as the
employees’ contributions are concerned, is that the recovery
from the employees is treated as income and the deposit is
allowed as deduction, subject to actual payment.
The SC, in the Vinay Cements ruling, specifically observed
that the taxpayer is entitled to deduction even during the pre-
amended period if the sums are deposited before the due date
of filing ROl. The dismissal of the SLP, by providing reasons,
amounts to an affirmation of the view taken by the underlying HC
in favor of the taxpayer against which the SLP was preferred by
the Tax Authority.
The Vinay Cements ruling is discussed and followed by the two
Delhi HC rulings in the case of CIT v Dharmendra Sharma [297
ITR 320] and CIT v. P.M. Electronics Ltd. [ITA No. 475/2007
dated 3 November 2008]. In view thereof, the amendment by
Finance Act 2003 permitting deduction for sums paid beyond the
statutory due date but before the due date of filing ROl needs to
be construed as having retrospective effect.
If the employees’ contributions are not deposited by the
statutory due date, the employer is required to pay interest
and penalty under the relevant statutes. Therefore, it can be
inferred that the statutes governing the relevant SSS permit
the employer to make the deposit with some delays. For tax
purposes, the taxpayer can get the benefit if the actual payment
is made before ROl is filed in terms of the Vinay Cements ruling.
Comments :-The law relating to deductibility of the employer’s
contributions to SSS was liberalized from tax year 2003-04
and such contributions are allowed as deduction if paid prior
to the due date of filing ROl. However, the issue pertaining to
deductibility of the employees’ contributions has been a subject
matter of debate in view of separate provisions applicable to
such contributions. Generally, it is advisable for taxpayers to
pay both the employees’ and the employer’s contributions within
the statutory due date to secure tax deduction. The present
ruling provides relief to those taxpayers who paid the employees’
contributions before the due date of filing ROl, although such
payments may be beyond the statutory due date.
Note:-
1.In a separate detailed decision in the case of Alom
Extrusions Ltd. [2009-TIOL-125-SC-IT], the SC held that
the amendment by Finance Act 2003 was curative in nature
and was introduced with a view to rationalize the tax
deduction for the employer’s contributions. The SC held
that the amendment applied to all prior years.
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITA No. 1063 of 2006
ITA No.75 5 of 2008
ITA No. 204 of 2009
ITA No. 12 14/2008 with ITA No. 1246/2008
ITA No. 50/2009
ITA No. 78/2009
Reserved on: December 04, 2009
Pronounced on: December 23, 2009
1.
ITA No. 1063/2008
Commissioner of Income Tax . . . Appellant
through: Ms. Prem Lata Bansal with
Mr. Paras Chaudhry, Advocates
VERSUS
AIMIL Limited . .. Respondent
through: Dr. Rakesh Gupta with
Ms. Poonam Ahuja, Advocates
2. ITA No. 12 14/2008
Nirmala Swami . . . Appellant
through: Mr. Satyen Sethi with
Mr. Johnson Bara, Advocates
VERSUS
Commissioner of Income Tax, Delhi - VIII . .. Respondent
through: Ms. Rashmi Chopra, Advocate
3. ITA No. 755/2008
Spearhead Digital Studio P. Ltd. . . . Appellant
through: Mr. Prakash Kumar, Advocate
VERSUS
Commissioner of Income Tax . .. Respondent
CORAM:-
THE HQN’BLE MR. JUSTICE A.K. SIKRI THE HON’BLE MR. JUSTICE SIDDHARTH MRIDUL
1.
Whether Reporters of Local newspapers may be allowed to see the Judgment? To be referred to the Reporter or not? Whether the Judgment should be reported in the Digest?
2. 3.
A.K. SIKRI, J.
1.
Though the assessees are different in these appeals, the
aforesaid question is common in all these cases, which falls
for consideration in almost identical factual backdrop. In
fact, it is a matter of pure interpretation of the provisions
of the Income Tax Act, 1961 (for short, the ‘Act’),
particularly Section 36(1) (va) of the Act. However, in
order to understand the implication, it would be necessary
to take note of facts of one appeal. We, accordingly, are
stating the facts as they appear in ITA No. 1063/2008.
2.
The case relates to the assessment year 2002-03. The
respondent assessee had filed its return on 30.10.2002
declaring income at Rs.7,95,430/-. During the assessment
proceedings, the Assessing Officer (AO) found that the
assessee had deposited employers’ contribution as well as
employees’ contribution towards provident fund and ESI
after the due date, as prescribed under the relevant Act/
Rules. Accordingly, he made addition of Rs.42,58,574/-
being employees’ contribution under Section 36(1)(va) of
the Act and Rs.30,68,583/- being employers’ contribution
under Section 43B of the Act. Felt aggrieved by this
assessment order, the assessee preferred appeal before
the CIT(A), who decided the same vide orders dated
15.7.2005. Though the CIT(A) accepted the contention of
the assessee that if the payment is made before the due
date of filing of return, no disallowance could be made in
view of the provisions of Section 438, as amended vide
Finance Act, 2003, he still confirmed the addition made by
the AO on the ground that no documentary proof was given
to support that payment was in fact made by the assessee.
The assessee filed an application under Section 154 of the
Act before the CIT(A) for rectification of the mistake. After
having satisfied that payment had, in fact, been made, the
CIT(A) rectified the mistake and deleted the addition by
holding that the assessee had made the payment before
the due date of filing of the return, which was a fact
apparent from the record.
3.
It was now the turn of the Revenue to feel agitated by
these orders and, therefore, the Revenue approached the
Income Tax Appellate Tribunal (ITAT) challenging the
orders of the CIT(A). The department has, however,
remained unsuccessful as the appeal preferred by the
department is dismissed by the ITAT vide its impugned
decision dated 31.12.2007, which is the subject matter of
appeal before us.
Perusal of the order of the Tribunal would show that it
has relied upon the judgment of the Supreme Court in
the case of CIT v. Vinay Cement Ltd., 213 CTR 268, to
support its decision to the effect that if the employers’ as
well as employees’ contribution towards provident fund
and ESI is paid before the due date of filing of return, no
disallowance can be made by the AO.
4.
In some other appeals preferred by the assessees, the
ITAT has taken contrary view and upheld the addition
made by the AOs. Under these circumstances, all these
appeals were admitted and heard on the following
question of law:-
“Whether the ITAT was correct in law in deleting the addition
relating to employees’ contribution towards Provident Fund and
ESI made by the Assessing Officer under Section 36(1)(va) of
the Income Tax Act, 1961?”
Section 36 of the Act deals with certain deductions
5.
which shall be allowed in respect of matters dealt with
therein, in computing the income referred to in Section
28 of the Act. Different types of deductions are provided
therein in various clauses of Section 36. Clause (iv) of
sub-section (1) deals with deductions on account of
contribution towards a recognized provident fund or an
approved superannuation fund made by the assessee as
an employer, subject to certain limits and also subject to
certain conditions as the CBDT may think fit to specify.
Clause (v) of sub-section (1) of Section 36 enables the
assessee to seek deduction in respect of sum paid by
it as an employer by way of contribution towards an
approved gratuity fund created by him for the exclusive
benefit of his employees under an irrevocable trust.
Then comes clause (va) which deals about employees’
contribution in the provident fund and ESI and reads as
under :-
“(Va) 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 or funds on or before the due date.
Explanation — For the purposes of this clause, “due date” means
the date by which the assessee is required as an employer to
credit an employee’s contribution to the employee’s account in
the relevant fund under any Act, rule, order or notification issued
thereunder or under any standing order, award, contract or service
or otherwise;”
6.
It would also be appropriate to take note of Section
438 of the Act primarily for the reason that in Vinay
Cement (supra) it was this provision which came up for
discussion before the Supreme Court and also keeping in
view the contention of learned counsel for the Revenue
that this judgment would be of no avail to the assessee
while discussing the matter under Section 36(1)(va) of
the Act. Section 438 stipulates that certain deductions
are to be given only on actual payment. Clause (b)
thereof talks about contribution by the assessee as
employer to any provident fund or superannuation fund
or gratuity fund or any other fund for the welfare of the
employees. Since we are concerned only with clause (b),
we reproduce the same for clearer understanding:-
“43B. Notwithstanding anything contained in any other provision of
this Act, a deduction otherwise allowable under this Act in respect
of
(b) any sum payable by the assessee as an employer by way
of contribution to any provident fund or superannuation fund or
gratuity fund or any other fund for the welfare of employees, (or)
shall be allowed irrespective of the previous year in which the
liability to pay such sum was incurred by the assessee according
to the method of accounting regularly employed by him only in
computing the income referred to in section 28 of that previous
year in which such sum is actually paid by him
Provided that nothing contained in this section shall apply in
relation to any sum which is actually paid by the assessee on or
before the due date applicable in his case for furnishing the return
of income under sub-section (1) of section 139 in respect of the
previous year in which the liability to pay such sum was incurred
as aforesaid and the evidence of such payment is furnished by the
assessee along with such return.”
7.
During the period in question with which we are
concerned, Section 438 contained second proviso also,
which stands omitted by the Finance Act, 2003 with
effect from 1.4.2004. Since, this provision existed at the
relevant time, it also needs to be reproduced :-
“Provided further that no deduction shall, in respect of any sum
referred to in clause (b), be allowed unless such sum has actually
been paid in cash or by issue of a cheque or draft or by any other
mode on or before the due date as defined in the Explanation
below clause (va) of sub-section (1) of section 36, and where such
payment has been made otherwise than in cash, the sum has been
realized within fifteen days from the due date.”
8.
As per the first proviso, if the payment is actually made on
or before the due date applicable in his case for filing the
return, it would be admissible as deduction. Thus, the ‘due
date’ is the date on which return is to be filed. The case
of the Revenue is that for employees’ contribution, the
2’ proviso was specifically incorporated and in the
present case, as we are concerned with non-deposit of the
employees’ contribution towards provident fund as well
as ESI contribution by the employer, only 2’ proviso be
looked into.
9.
What is sought to be argued is that distinction is to be
made
contribution on the one hand and employees’ contribution
on the other hand. It was submitted that when employees’
contribution is recovered from their salaries/wages, that is
trust money in the hands of the assessee. For this reason,
rigors of law are provided by treating it as income when the
assessee receives the employees’ contribution and enabling
the assessee to claim deduction only on actual payment by
due date specified under the provisions.
while
treating
the
case
related
to
employers’
10.
Ms. Prem Lata Bansal, learned counsel for the Revenue,
thus, argued that the second proviso to Section 438, as it
stood
deduction in respect of any sum referred to in clause (b)
shall not be allowed unless such sum has actually been
paid in cash or by issuance of cheque or draft or by any
other mode on or before the due date, as defined in the
explanation below clause (va) of sub-section (1) of Section
36. Thus, the assessee would earn the entitlement only if
the actual payment is made before the due date specified
in explanation below clause (va) of sub-section (1) of
Section 36 of the Act. As per the said explanation, ‘due
date’ means the date by which the assessee is required, as
an employer, to credit the employees’ contribution to the
employees account in the relevant fund under any Act,
rules, order or notification issued thereunder or under any
standing order award contract of service or otherwise.
at
the
relevant
time,
clearly
mentioned
that
11.
Before we delve into this discussion, we may take note of
some more provisions of the Act. Section 2(24) of the Act
enumerates different components of income. It, Inter alia,
stipulates that income includes any sum received by the
assessee from his employees as contributions to any
provident fund or superannuation fund or any fund set up
under the provisions of the Employees’ State Insurance
Act, 1948 (34 of 1948), or any other fund for the welfare of
such employees. It is clear from the above that as soon as
employees contribution towards provident fund or ESI is
received by the assessee by way of deduction or otherwise
from the salary/wages of the employees, it will be treated
as ‘Income’ at the hands of the assessee. It clearly follows
there from that if the assessee does not deposit this
contribution with provident fund/ESI authorities, it will be
taxed as income at the hands of the assessee. However, on
making
assessee
provisions of Section 36(1)(va) of the Act. Section 438(b),
however,
permissible only on actual payment. This is the scheme of
the Act for making an assessee entitled to get deduction
from
concerned. It is in this backdrop we have to determine as
to at what point of time this payment is to be actually
made.
deposit
becomes
with
entitled
the
concerned
to
authorities,
deduction
under
the
the
stipulates
that
such
deduction
would
be
income
insofar
as
employees’
contribution
is
12.
Since the ITAT while holding that the amount would qualify
for deduction even if paid after the due dates prescribed
under the Provident Fund/ESI Act but before the filing of
the income tax returns by placing reliance upon the
Supreme Court judgment in Vinay Cement (supra), at this
juncture we take note of the discussion of ITAT on this
aspect:-
“11. We have carefully considered the rival submissions in the light
of material placed before us. In the assessment order Ld. AO has
categorically stated that what the amount due was for which month
in respect of EPF, Family Pension, PF inspection charges and ES!
deposits and what were the due dates for these deposits and on which
date these deposits were made. The dates of deposits are mentioned
between 23rd May 2001 to 23rd April 2002. The latest payment is
made on 23rd April 2002 and assessee being limited company had
filed its return on 20th October, 2002 which is a date not beyond
the due date of filing of the return. Thus, it is clear beyond doubt
that all the payments which have been disallowed were made much
earlier to the due date of filing of the return. The disallowance is not
made by the AO on the ground that there is no proof of making such
payment but disallowance is made only on the ground that these
payments have been made beyond the due dates of making these
payments under the respective statute. Thus, it was not an issue that
the payments were not made by the assessee on the dates which have
been stated to be the dates of deposits in the assessment order. If
such is a factual aspect then according to latest position of law clarified
by Hon’ble Supreme Court in the case of CIT Vs Vinay Cement Ltd.
that no disallowance could be made if the payments are made before
the due date of filing the return of income. This issue came before
Hon’ble Supreme Court in the case of CIT Vs. Vinay Cement Ltd. which
was a special leave petition filed by the department against the High
Court Order of 26th June, 2006 in ITA No. 2/05 and ITA No. 56/03 and
ITA No. 80/03 of the High Court of Guwahati, Assam and it is order
dated 7th March, 2007. A copy of the said order is placed on record.
The observations of their Lordships on the issue are as under :-
“In the present case we are concerned with the law as it stood prior to
the amendment of Sec. 43B. In the circumstances the assessee was
entitled to claim the benefit in Sec. 43B for that period particularly in
view of the fact that he has contributed to provident fund before filing
of the return.
The special leave petition is dismissed.”
13.
It is clear from the above that in V/nay Cement (supra),
the SLP preferred by the Revenue against the judgment of
the Guwahati High Court was dismissed making the
aforequoted observations. The reasons are given and, thus,
it amounts to affirmation of the view taken by the High
Court of Guwahati.
14.
When we keep that proposition in mind and also take into
consideration various judgments where I//nay Cement
(supra) is applied and followed, it will not be possible to
accept the contention of the Revenue.
15. In CITy. Dharmendra Sharma, 297 ITR 320, this Court
specifically dealt with this issue and relying upon the
aforesaid judgment of the Guwahati High Court, as affirmed
by the Supreme Court in V/nay Cement (supra), the appeal
of the Revenue was dismissed. More detailed discussion is
contained in another judgment of this Court in CIT v. P.M
Electronics Ltd. (ITA No. 475/2007 decided on 3.11.2008).
Specific questions of law which were proposed by the
Revenue in that case were as under :-
“(a) Whether amounts paid on account of PF/ESI after due date are
allowable in view of Section 43B, read with Section 36(1)(va) of the
Act?
(b) Whether the deletion of the 2nd proviso to Section 43B by way of
amendment by the Finance Act, 2003 is retrospective in nature?”
16.
These questions were answered by the Division Bench in
the following manner :-
“7. Having heard the learned counsel for the Revenue, as well as,
the assessee, we are of the view that the view taken by the Tribunal
deserves to be sustained as it is no longer res integra in view of the
decision of the Supreme Court in the case of CITy V/nay Cement Ltd:
213 1TR 268 which has been followed by a Division Bench of this Court
in the case of CIT v. Dharmendra Sharma: 297 ITR 320.
8. Despite the aforesaid judgments, the learned counsel for the
Tribunal has contended that in view of the judgment of the Division
Bench of the Madras High Court in the case of CITy. Synergy financial
Exchange Ltd: (2007)288 ITR 366 and that of the Division Bench of
the Bombay High Court in the case of CIT v. M/s Pamwi Tissues Ltd:
(2008) Taxindiaon/inecom 104 (TJOL) the issue requires consideration.
According to us, in view of the dismissal of the Special Leave Petition
in the case of V/nay Cement (supra) by the Supreme Court by a
speaking order, the submission of the learned counsel for the Revenue
has to be rejected at the very threshold. The reason for the same is as
follows:
9 The Gauhati High Court in the case of CIT v. George Wililamson
(Assam) Ltd: (2006) 284 IT!? 619 (Gauhati dealt with the very same
issue. In the said judgment the Division Bench of the Gauhati High
Court noted a contrary view taken by the Kerala High Court in the
case of CIT v. South India Corporation Ltth (2000) 242 ITR 114. After
noting the said judgment the fact that the amendments had been
made to the provisions of Section 43B of the Act by virtue of Finance
Act, 2003 w.e.f 1.4.2004 it agreed with the submission of the learned
counsel for the assessee that by virtue of the omission of the second
proviso and the omission of Clauses (a), (c), (d), (e) and (f) without
any saving clause would mean that the provisions were never in
existence. For this purpose, in the said case the assessee had placed
reliance on the judgment of a Constitution Bench of the Supreme
Court in the case of Koihapur Canesugar Works Ltd v. Union of India:
(2000) 2 5CC 536 and Rayala Corporation P. Ltd v. Director of
Enforcement (1969) 2 ICC 412 and General Finance Co. v. Asst. CIT
(2002) 257 ITR 338 (SC). The said submissions found favour with the
Division Bench of the Guahati High Court and relying on earlier
decisions of its own Court in CiT v. Assam Tribune: (2002) 253 ITt? 93
and CIT v. Bha rat Bamboo and Tiber Suppliers: (1996) 219 IT)? 212
the Division Bench dismissed the appeal of the Revenue. It transpires
that the aforesaid matter was taken up in appeal alongwith other
matters including V/nay Cement (supra). The order in V/nay Cement
(supra) was passed by the Supreme Court on 7.3.2007 wherein it
observed as follows:- “Delay condoned. In the present case we are
concerned with the law as it stood prior to the amendment of Section
43-B. In the circumstances, the assessee was entitled to claim the
benefit in Section 43-B for that period particularly in view of the fact
that he has contributed to provident fund before filing of the return.
Special Leave Petition is dismissed.”
10. In view of the above, it is quite evident that the special
leave petition was dismissed by a speaking order and while
doing so the Supreme Court had noticed the fact that the
matter in appeal before it pertain to a period prior to the
amendment brought about in Section 43B of the Act. The
aforesaid position as regards the state of the law for a
period prior to the amendment to Section 43B has been
noticed by a Division Bench of this Court in Dharmendra
Sharma (supra). Applying the ratio of the decision of the
Supreme Court in V/nay Cement (supra) a Division Bench
of this Court dismissed the appeals of the Revenue. In
the passing we may also note that a Division Bench of the
Madras High Court in the case of CIT v. Nexus Computer
(P) Ltd by a judgment dated 18.8.08 passed in Tax Case
(A) No. 1192/2008 discussed the impact of both the
dismissal of the special leave petition in the case of George
Williamson (Assam) Ltd (supra) and V/nay Cement (supra)
as well as a contrary view of the Division Bench of its own
Court in Synergy Financial Exchange (supra). The Division
Bench of the Madras High Court has explained the effect
of the dismissal of a special leave petition by a speaking
order by relying upon the judgment of the Supreme Court
in the case of Kunhayammed and Others v. State of Kerala
and another: 119 fTC 505 at page 526 in Paragraph 40 and
noted the following observations: -
“It the order refusing leave to appeal is a speaking order,
ie., gives reasons for refusing the grant of leave, then
the order has two implications. Firstly, the statement of
law contained in the order is a declaration of law by the
Supreme Court within the meaning of Article 141 of the
Constitution. Secondly, other than the declaration of law,
whatever is stated in the order are the findings recorded
by the Supreme Court which would bind the parties thereto
and also the Court, Tribunal or authority in any proceedings
subsequent thereto by way of judicial discipline, the
Supreme Court being the Apex Court of the country, But,
this does not amount to saying that the order of the Court,
Tribunal or authority below has stood merged in the order
of the Supreme Court rejecting special leave petition or that
the order of the Supreme Court is the only order binding
as res judicata in subsequent proceedings between the
parties.”
11. Upon noting the observations of the Supreme Court in
Kunhayammed and Others (supra) the Division Bench of
the Madras High Court in the case of Nexus Computer Pvt
Ltd (supra) came to the conclusion that the view taken by
the Supreme Court in V/nay Cement (supra) would bind
the High Court as it was non declared by the Supreme
Court under Article 141 of the Constitution. 12. We are in
respectful agreement with the reasoning of the Madras High
Court in Nexus Computer Pvt Ltd (supra). Judicial discipline
requires us to follow the view of the Supreme Court in
Vinay Cement (supra) as also the view of the Division
Bench of this Court in Dharmendra Sharma (supra). 13.
In these circumstances, we respectfully disagree with the
approach adopted by a Division Bench of the Bombay High
Court in M/s Pamwi Tissues Ltd (supra).
14. In these circumstances indicated above, we are of the
opinion that no substantial question of law arises for our
consideration in the present appeal. The appeal is, thus,
dismissed.”
It also becomes clear that deletion of the 2nd proviso is
treated as retrospective in nature and would not apply at
all. The case is to be governed with the application of the l
proviso.
17.
We may only add that if the employees’ contribution is not
deposited by the due date prescribed under the relevant
Acts and is deposited late, the employer not only pays
interest on delayed payment but can incur penalties also,
for which specific provisions are made in the Provident
Fund Act as well as the ESI Act. Therefore, the Act permits
the employer to make the deposit with some delays,
subject to the aforesaid consequences. Insofar as the
Income Tax Act is concerned, the assessee can get the
benefit if the actual payment is made before the return is
filed, as per the principle laid down by the Supreme Court
in V/nay Cement (supra).
18.
We, thus, answer the question in favour of the assessee
and against the Revenue. As a consequence, the appeals
filed by the assessees stand allowed and those filed by the
Revenue are dismissed.
No costs.
(A.K. SIKRI)
JUDGE
(SIDDHARTH MRIDUL) JUDGE
December 23, 2009
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITANo.755of2008
Reserved on: December 04, 2009
Pronounced on: December 23, 2009
Spearhead Digital Studio P. Ltd. . . . Appellant
through: Mr. Prakash Kumar, Advocate
VEPSUS
Commissioner of Income Tax . .. Respondent
through: Mr. Sanjeev Sabharwal, Advocate
CORAM :-
THE HQN’BLE MR. JUSTICE A.K. SIKRI
THE HQN’BLE MR. JUSTICE SIDDHARTH MRIDUL
1. Whether Reporters of Local newspapers may be allowed to see
the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
For orders, see ITA No. 1063/2006.
(A.K. SIKRI)
JUDGE
(SIDDHARTH MRIDUL)
JUDGE
December 23, 2009
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITANo. 204of 2009
Reserved on: December 04, 2009
Pronounced on: December 23, 2009
Commissioner of Income Tax, Delhi-V . . . Appellant
through: Mr. N.P. Sahni, Advocate
VEPSUS
M/s. Net 4 India Ltd. . .. Respondent
through: Dr. Rakesh Gupta with
Ms. Poonam Ahuja, Advocates
CORAM :-
THE HQN’BLE MR. JUSTICE A.K. SIKRI
THE HQN’BLE MR. JUSTICE SIDDHARTH MRIDUL
1. Whether Reporters of Local newspapers may be allowed to see
the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
For orders, see ITA No. 1063/2006.
(A.K. SIKRI)
JUDGE
(SIDDHARTH MRIDUL)
JUDGE
December 23, 2009
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITA No. 1214/2008 with ITA No. 1246/2008
Reserved on: December 04, 2009
Pronounced on: December 23, 2009
1. ITA No. 12 14/2008
Nirmala Swami .. . Appellant
through: Mr. Satyen Sethi with
Mr. Johnson Bara, Advocates
VEPSUS
Commissioner of Income Tax, Delhi - VIII . .. Respondent
through: Ms. Rashmi Chopra, Advocate
2. ITA No. 1246/2008
M/s. Ekta Agro Industries Ltd. . . . Appellant
through: NEMO
VEPSUS
Income Tax Officer, Ward 11(1) . .. Respondent
through: NEMO
CORAM :-
THE HQN’BLE MR. JUSTICE A.K. SIKRI
THE HQN’BLE MR. JUSTICE SIDDHARTH MRIDUL
1. Whether Reporters of Local newspapers may be allowed to see
the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
For orders, see ITA No. 1063/2006.
(A.K. SIKRI)
JUDGE
(SIDDHARTH MRIDUL)
JUDGE
December 23, 2009
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITANo.50/2009
Reserved on: December 04, 2009
Pronounced on: December 23, 2009
Commissioner of Income Tax-Il . . . Appellant
through: Mr. Sanjeev Sabharwal, Advocate
VEPSUS
Modipon Ltd. . .. Respondent
through: Mr. Prakash Kumar, Advocate
CORAM :-
THE HQN’BLE MR. JUSTICE A.K. SIKRI
THE HQN’BLE MR. JUSTICE SIDDHARTH MRIDUL
1. Whether Reporters of Local newspapers may be allowed to see
the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
A.K. SIKRI, J.
For orders, see ITA No. 1063/2006.
(A.K. SIKRI)
JUDGE
(SIDDHARTH MRIDUL)
JUDGE
December 23, 2009
IN THE HIGH COURT OF DELHI AT NEW DELHI
ITA No. 78/2009
Reserved on: December 04, 2009
Pronounced on: December 23, 2009
Commissioner of Income Tax-Il . . . Appellant
through: Mr. Sanjeev Sabharwal, Advocate
VEPSUS
Modipon Ltd. . .. Respondent
through: Mr. Prakash Kumar, Advocate
CORAM :-
THE HQN’BLE MR. JUSTICE A.K. SIKRI
THE HQN’BLE MR. JUSTICE SIDDHARTH MRIDUL
1. Whether Reporters of Local newspapers may be allowed to see
the Judgment?
2. To be referred to the Reporter or not?
3. Whether the Judgment should be reported in the Digest?
26 March 2011
sir, thanks for ur information, but i m having one more doubt regarding the payment of pf, i.e pf remittance for jan'11 is 15th of feb'11 or 20th of feb'11(grace period of 5 days)but payment is made on 21st feb'11, now i m in confusion that if last date of remitance i.e 20th feb'11 is sunday then wat will be the due date for payment whether the following day or previous day of holiday i.e sunday. pls help me out sir...
CAclubindia
