COMMISSIONER OF INCOME TAX vs. GITA GINNING & OIL INDUSTRIES

PDF · subscribers
ITR/51/1995HC GujaratGJHC24022376199519 March 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 Income-tax Appellate Tribunal was right in law and on facts. The Court's decision was based on its own prior judgment in CIT vs. M/s. Chandulal Venichand and others (209 ITR 7), which was subsequently approved by the Supreme Court in Allied Motors (P) Ltd. vs. CIT (224 ITR 677). The ratio decidendi is that if an unpaid liability, such as sales tax, is paid before the due date for filing the return under Section 139(1) of the Income-tax Act, then no disallowance can be made by invoking the provisions of Section 43B. The question referred to the Court was answered in the affirmative, in favour of the assessee and against the Revenue. The reference was disposed of accordingly, with no order as to costs.

What were the facts?

The Commissioner of Income Tax (Revenue) has referred a question of law to the High Court of Gujarat at Ahmedabad under Section 256(1) of the Income-tax Act, 1961. The reference arises from an order of the Income-tax Appellate Tribunal (ITAT). The assessee is Gita Ginning & Oil Industries. The dispute concerns the disallowance of an unpaid liability under Section 43-B of the Income-tax Act, 1961. The specific factual matrix leading to the ITAT's decision is that the unpaid liability was discharged before the filing of the return under Section 139(1). The amount in dispute is not explicitly stated.

What were the issues?

1. Whether the appellate Tribunal is right in law and on facts in holding that if the unpaid liability is discharged before filing of the return under section 139(1), disallowance cannot be made invoking the provisions of section 43-B? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the Tribunal's finding, which is being upheld, implies that the assessee argued that payment before the due date of filing the return negates the disallowance under Section 43-B. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue before the High Court. However, the reference of the question by the Commissioner of Income Tax indicates that the Revenue disputed the Tribunal's finding regarding the applicability of Section 43-B when the liability was paid before the return filing date.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 51 of 1995

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 GITA GINNING & OIL INDUSTRIES -------------------------------------------------------------- Appearance: MR B BNaik for MANISH R BHATT for Petitioner SERVED BY RPAD - (N) for the Respondent

--------------------------------------------------------------

CORAM : MR.JUSTICE R.K.ABICHANDANI and MR.JUSTICE KUNDAN SINGH Date of decision: 19/03/98

ORAL JUDGEMENT (Per R.K.Abichandani,J)

The Income-tax Appellate Tribunal has referred the following question for the opinion of this Court under section 256(1) of the Income-tax Act, 1961. "

1.

Whether the appellate Tribunal is right in law and on facts in holding that if the unpaid liability is discharged before filing of return under section 139(1), disallowance cannotbe made invoking the provisions of section 43-B ?"

2.

The above question is squarely covered by the decision of this Court in CIT vs. M/s. Chandulal Venichand and others reported in 209 ITR,7 which view was approved by the Supreme Court in Allied Motors (P) Ltd. vs.CIT, reported in 224 ITR, 677. 3. Following the decision of the Supreme Court in Allied Motors (P) Ltd. (Supra), and the ratio of this Court in M/s. Chandulal Venichand (supra), we are of the view that the Tribunal was right in holding that if unpaid sales tax liability is paid before the due date for filing of the return under section 139(1) of the Income tax Act, no addition could be made invoking the provisions of section 43B of the Act. The question referred to us is therefore, answered in the affirmative against the Revenue and in favour of the assessee. The Reference stands disposed of accordingly with no order as to costs.

... ***darji

More judgments on Section 256(1)

All 755 judgments and leading authorities on Section 256(1) →

Recent GST High Court judgments

Search GST case law →