COMMISSIONER OF INCOME TAX vs. GAUTAMKUMAR MITHALAL JAIN

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ITR/345/1993HC GujaratGJHC24021349199313 April 1998Author: HONOURABLE MR. JUSTICE R.K.ABICHANDANI,HONOURABLE MR. JUSTICE KUNDAN SINGH2 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the question referred to it stands concluded by the Supreme Court's decision in Allied Motors (P) Limited vs. C.I.T. (224 ITR 677). This Supreme Court decision approved the High Court's own view in C.I.T vs. Chandulal Venechand (209 ITR 7). In Chandulal Venechand's case, the High Court had interpreted Section 43B, including its proviso, to mean that a sales tax liability incurred in a previous year would be allowable as a deduction if it was actually paid before the due date for furnishing the return of income under Section 139(1) for that relevant previous year. Therefore, the High Court answered the referred question in the affirmative, in favour of the assessee and against the Revenue. The reference is disposed of accordingly.

What were the facts?

This case involves an Income Tax Reference No. 345 of 1993 before the High Court of Gujarat at Ahmedabad. The reference was made by the Income Tax Appellate Tribunal, Ahmedabad, concerning a question of law and fact. The assessee is Gautamkumar Mithalal Jain, and the revenue is the Commissioner of Income Tax. The assessment year(s) are not explicitly stated, nor is the specific order or action under challenge, other than the Tribunal's decision. The amount in dispute is not mentioned. The procedural history involves the Tribunal referring a question to the High Court under Section 256(1) of the Income Tax Act.

What were the issues?

1. Whether the Appellate Tribunal is right in law and on facts in holding that if the unpaid sales tax liability pertaining to the last quarter is paid within the time stipulated for filing of return under section 139 (1), the provisions of section 43 B cannot be made applicable? The Assessee's contention is not recorded in the judgment. The Revenue's contention is not recorded in the judgment. The Tribunal's decision, which forms the basis of the reference, is that the unpaid sales tax liability for the last quarter, if paid within the time for filing the return under Section 139(1), is not subject to the disallowance under Section 43B.

Which sections of the Income-tax Act were involved?

Section 43B,Section 139(1),Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No. 345 of 1993

For Approval and Signature:

Hon'ble MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH ======================================================== 1. Whether Reporters of Local Papers may be allowed to see the judgements?

2.

To be referred to the Reporter or not?

3.

Whether Their Lordships wish to see the fair copy of the judgement?

4.

Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge?

---------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus GAUTAMKUMAR MITHALAL JAIN ---------------------------------------------------------- Appearance: MR MIHIR JOSHI with MR M R BHATT for Petitioner SERVED BY RPAD - (N) for Respondent No. 1 ----------------------------------------------------------

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH Date of decision: 13/04/98

ORAL JUDGEMENT [Per : Abichandani, J.]

The Income Tax Appellate Tribunal, Ahmedabad has referred the following question for the opinion of this Court under Section 256 (1) of the Income Tax Act.

"Whether, the Appellate Tribunal is right in law and on facts in holding that if the unpaid sales tax liability pertaining to the last quarter is paid within the time stipulated for filing of return under section 139 (1) the provisions of section 43 B cannot be made applicable ?" The question referred to this Court now stands concluded by the decision of Hon'ble the Supreme Court in approved by the Supreme Court. In Chandulal Venechand's case, this Court while construing the provisions of Section 43-B had taken a view that the proviso to Section 43-B of the Act related back to the date when Section 43-B came into operation i.e., April 1, 1984. It was held that such liability would therefore be allowable as a deduction provided the assessee established that it was discharged by actual payment before the date applicable in his case for furnishing the return of income under Section 139 (1) of the Act in respect of relevant previous year in which the liability had been incurred.

In view of this settled legal position, the question referred to this Court is answered in the affirmative in favour of the assessee and against the Revenue. The Reference stands disposed of accordingly with no order as to costs.

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Prakash*

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