Case Law Details
Brief Facts of the case-
The facts stated briefly are that the Assessee Company is engaged in the business of manufacturing basic chemicals and chemical intermediates and is a Government of India enterprise. The return of income of the Assessee for the assessment Year 2006-07 was filed on 30 th November 2006 declaring a total loss of Rs. 28,54,70,623/-. The case of the Assessee was selected for scrutiny and thereafter the assessment was completed and an Assessment Order was passed under section 143(3) of the Act determining the total income of the Assessee at Rs.25,75,61,100/- after making various additions / dis allowances. For the purpose of the present Appeal, the dis allowance with reference to the payment of employees’ contribution to the P.F. amounting to Rs. 1,82,77,138/- and expenses of Rs.10,00,300/- towards bond registration charges are in dispute. Being aggrieved by the said Assessment Order, the Assessee preferred an Appeal before the CIT (Appeals) who by his order dated 17th February 2010 partly allowed the Assessee’s Appeal. With reference to the employees’ contribution to P.F., the CIT (Appeals) directed the Assessing Officer to allow the deduction in respect of payments made within the grace period and disallow the payments made after the grace period. As regards bond registration charges, the CIT (Appeals) observed that this very issue was covered by the order in the Assessee’s own case for Assessment Year 2003-04 wherein appeal orders for Assessment Years 1998-99, 2001-02 and 2002-03 were followed and accordingly deleted the disallowance towards the bond registration charges. Being dissatisfied with the order of the CIT (Appeals), the evenue preferred an Appeal before the ITAT which has dismissed the same by the impugned order.
Held by High Court
The section referred to above viz. section 43B and the amendments thereto came up for consideration before the Hon’ble Supreme Court in the case of Commissioner of Income Tax v/s Alom Extrusions Ltd., reported in (2009) 319 ITR 306 (SC) when the Supreme Court inter alia held that the amendments to the said section brought about by the Finance Act, 2003 with effect from 1 st April 2004 were retrospective in nature and would operate from 1 st April 1988. The ITAT, relying upon the aforesaid judgment of the Supreme Court, has dismissed the Revenue’s Appeal and confirmed the order passed by the CIT (Appeals). In this view of the matter and in view of the fact that the Supreme Court has expressly held that the amendments to section 43B that were brought about by the Finance Act, 2003 are retrospective in nature, we find that the ITAT was fully justified in deleting the addition of Rs.1,82,77,138/- on account of delayed payment of Provident Fund of employees’ contribution. We therefore find that no substantial question of law arises on this count as sought to be contended by Mr Malhotra on behalf of the Revenue.
Even otherwise, we fail to understand how this deduction could have been disallowed to the Assessee. Admittedly, the Assessment Year in question is 2006-07. The second proviso to section 43B quoted above was deleted with effect from 1st April 2004 and simultaneously the first proviso was also amended bringing about a uniformity in deductions claimed towards tax, duty, cess and fee on the one hand and contribution to the employees’ provident fund, superannuation fund and other welfare funds on the other. These deductions being claimed in the return of income filed for the Assessment Year 2006-07, the amendments to Section 43B which came into force with effect from 1st April 2004 would have clearly applied to the Assessee’s case. In this view of the matter also, we find that the ITAT was fully justified in deleting the addition of Rs.1,82,77,138/- on account of delayed payment of provident fund of employees’ contribution.
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