High Court Of Rajasthan : Jaipur Bench
CIT vs. Ram Singh
Section 43B
Asst. Year 1987-88
Y.R. Meena & A.C. Goyal, JJ.
IT Ref. Appln. No. 24 of 1985 & 21 of 1995
31st January, 2002
Counsel Appeared
J.K. Singhi, for the Applicant : Mahendra Gargia, for the Respondent
JUDGMENT
BY THE COURT :
On an application filed under s. 256(1) of the IT Act, the Tribunal has referred the following questions for the opinion of this Court : “Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in deleting the addition made under s. 43B notwithstanding the fact that the assessee did not make the payment of outstanding sales-tax liability during the previous year relevant to the asst. yr. 1987-88 ?” The assessee is a registered firm and had claimed liability on account of sales-tax amounting to Rs. 85,788, which was disallowed by the AO on the ground that the payment was made after the loose of the accounting year. The relevant assessment year is 1987-88. In appeal, the CIT(A) has upheld this disallowance. In appeal before the Tribunal, the Tribunal has allowed the claim of the assessee following the decision CIT vs. Bimal Mrishna Sil & Bros (1992) 108 CTR 197 (Cal) : TC 19R.733. Mr. Gargia, learned counsel for the assessee submits that now the issue has been concluded by the apex Court that if the liability of sale-tax has not been paid before the due date but paid as provided in proviso to s. 43B of the Act, which clarifies that if the amount of sales-tax has been paid after submission of returns but within the grace period allowed under the relevant provisions of the sales-tax, the deduction under s. 43B cannot be denied.
In Allied Motors (P) Ltd. vs. CIT (1997) 139 CTR (SC) 364 : (1997) 224 ITR 677 (SC) : TC S19.2151, their lordships have considered the Explanation to provision (sic-proviso) of s. 43B, which provides that if the amount has been paid within 30 days of the end of the quarter though beyond the accounting year, the deduction cannot be disallowed after this Explanation is inserted and Explanation has retrospective effect. At p. 684 of the aforesaid judgment, their Lordships have considered the amendment and its effect holding that this amendment will have a retrospective effect, which reads as under : “While interpreting s. 43B without the first proviso, some of the High Courts, in order to prevent undue hardship to the assessee, had taken the view that s. 43B would not be attracted unless the sum payable by the assessee by way of tax, duty, cess or fee was payable in the same accounting year. If the tax was payable in the next accounting year, s. 43B would not be attracted. This was done in order to prevent any undue hardship to assessees such as the ones before us. The memorandum of reasons takes note of the combined effect of s. 43B and the first proviso inserted by the Finance Act, 1987. After referring to the fact that the first proviso now removes the hardship caused to such taxpayers, it explains the insertion of Expln. 2 as being for the purpose of removing any ambiguity about the term “any sum payable” under cl. (a) of s. 43B. This Explanation is made retrospective. The memorandum seems to proceed on the basis that s. 43B read with the proviso takes care of the hardship situation and hence Expln. 2 can be inserted with retrospective effect to make clear the ambit of s. 43B(a). Therefore, s. 43B(a), the first proviso to s. 43B and Expln. 2 have to be read together as giving effect to the true intention of s. 43B. If Expln. 2 is retrospective the first proviso will have to be so construed. Read in this light also, the proviso has to be read into s. 43B from its inception along with Expln. 2.”
Following the view taken by their lordships in the case of Allied Motors (P) Ltd. (supra) no interference is called for in the order of the Tribunal. In the result, we answer the question in affirmative i.e., in favour of the assessee and against the Revenue.
[Citation : 256 ITR 131]
