C/TAXAP/52/2020 ORDER IN HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 52 of 2020 SEQUEL LOGOSTICS PRIVATE LIMITED Versus CHIEF COMMISSIONER OF INCOME TAX Appearance: M/S WADIAGHANDY AND CO(5679) for Appellant(s) No. 1 for Opponent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 03/02/2020 ORAL ORDER (PER : HONOURABLE MR.JUSTICE BHARGAV D. KARIA) 1. This appeal is filed by assessee under Section 260A of Income Tax Act, 1961 (for short Act, 1961 ) against order dated 18th April, 2018 passed by Income Tax Appellate Tribunal Ahmedabad C Bench, Ahmedabad, in ITA No.2238/Ahd/2014 for A.Y.2010-11. 2. following questions are proposed as substantial questions of law, for consideration of this Court: (i) Whether Appellate Tribunal was right in law and in facts in confirming disallowance under Section 36(a)(va) read with Section 2(24)(x) of Income Page 1 of 5 Downloaded on : Tue Apr 21 10:30:15 IST 2020 C/TAXAP/52/2020 ORDER Tax Act, 1961, paid by Appellate towards employees contribution to Provident Fund and Employees State Insurance? (ii) Whether due date for payment of contribution to Provident Fund and Employees State Insurance Scheme is to be considered from 15 days from close of every month in which wages are disbursed or 15 days from date from which wages of employees becomes due? 3. appellant-assessee filed return of income for A.Y. 2010-11 claiming deduction of Rs.2,39,822/-, being amount paid towards employees contribution to Provident Fund ( PF ) and Employees State Insurance ( ESI ) under Section 36(1)(va) read with Section 2(24)(x) of Act, 1961. 4. Assessing Officer while passing Assessment Order, under Section 143(3) of Act, disallowed amount of Rs.2,39,822/-, claimed as deduction by appellant-assessee towards PF and ESI, on ground that same was not paid within due date. 5. assessee, being aggrieved by Assessment Order, preferred appeal before CIT(A). CIT(A), dismissed appeal. 6. appellant-assessee therefore preferred appeal before Tribunal. However, Tribunal, relied upon decision of this Court in case of CIT vs Gujarat State Road Transport Corporation 366 Page 2 of 5 Downloaded on : Tue Apr 21 10:30:15 IST 2020 C/TAXAP/52/2020 ORDER ITR 170 (Gujarat) and rejected appeal filed by appellant, as under: 3. Learned representatives fairly agree that aforesaid issue is squarely covered against assessee by Hon ble jurisdictional High Court s judgment in case of CIT vs. Gujarat State Road Transport Corporation, 366 ITR 170 (Guj.), wherein it is categorically held that in case of delayed deposit of employees contribution to PF, same will not be deductable in computing income under section 28 of Act. law so laid down by Hon ble jurisdictional High Court is binding on us. mere fact that appeal against said decision is pending before Hon ble Supreme Court does not dilute binding nature of this judicial precedent. As regard dismissal of SLP in case of Rajasthan State Beverages Corporation Ltd, (2017) 84 taxmann.com 185 (SC), it is only elementary that when SLP is dismissed by non- speaking order, it does not constitute law declared by Hon ble Supreme Court, and as such, it is not binding under Article 141 of Constitution of India. authority, for this proposition, is contained in series of judgments of Hon ble Supreme Court, including inter alia, in cases of State of Manipur vs. Thingujam Brojen Meetai, (1996) 9 SCC 29, Om Prakash Gargi v. State of Punjab, (1996) 11 SCC 399 and Sun Export Corpn v. Collector of Customs, AIR 1997 SC 2658. We, therefore, see no legally sustainable merit in case of assessee and, respectfully following judgment of Hon ble jurisdictional High Court in case of Gujarat State Road Transport Corporation (supra), dismiss grievance of assessee. 4. In result, ground No.1 is dismissed. 7. Thus Tribunal held that in case of delayed deposit of employees contribution to PF and ESI, same will not be deductable in computing income, under Section 28 of Act. Page 3 of 5 Downloaded on : Tue Apr 21 10:30:15 IST 2020 C/TAXAP/52/2020 ORDER 8. Learned advocate Mr.Tanvish Bhatt appearing for appellant submitted that decision of this Court in case of CIT vs. Gujarat State Road Transport Corporation (Supra) is challenged before Hon ble Supreme Court and SLP is pending. It was further submitted that assessee would like to keep issue alive and hence preferred this appeal after considerable delay, which is already condoned by this Court. 9. However, this question is already covered by decision of this Court rendered in case of M/s Checkmate Facility and Electronic Solutions Pvt. Ltd. versus Deputy Commissioner of Income Tax Circle 1 in Tax Appeal No.1256 of 2018, decided on 15th October, 2018. This Court has applied decision of CIT vs. Gujarat State Road Transport Corporation (Supra) and held as under: This provision thus requires employer before paying employee his wages to deduct employee s contribution along with employer s own contribution as fixed by Government. It is further required that he shall within fifteen days of close of every month pay same to fund such contribution and administrative charges. In terms of this provision thus, after deducting employee s contribution towards funds, same has to be deposited with Government within fifteen days of close of every month. Reference to fifteen days of close of month must be in relation to month during which payment of wages is to be made and corresponding liability to deduct employee s Page 4 of 5 Downloaded on : Tue Apr 21 10:30:15 IST 2020 C/TAXAP/52/2020 ORDER contribution to fund arises. expression within fifteen days of close of every month therefore must be interpreted as having reference to close of month, for which, wages are required to be paid with corresponding duty to deduct employee s contribution and to deposit same in fund. 10. Moreover, in case of Ask Me Lab Con Services Ltd V/s. Income Tax Officer Ward 1(1)(4)in Tax Appeal No.25 of 2019, decided by Co-ordinate Bench on 11th June, 2019, by following decision given in case of M/s Checkmate Facility and Electronic Solutions Pvt. Ltd. (supra) held that due date of deposit of PF and ESI contribution is to be considered from close of month, for which charges is required to be paid by employer. 11. In such circumstances, none of questions of law, proposed by appellant, can be termed as substantial question of law. appeal therefore fails and accordingly stands dismissed. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) PALAK Page 5 of 5 Downloaded on : Tue Apr 21 10:30:15 IST 2020 Sequel Logostics Private Limited v. Chief Commissioner of Income-tax