THE C.I.T. JDR. vs. SMT. PARAMJIT KAUR

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ITR/126/1996HC Punjab & HaryanaPHHC01034927199622 November 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
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What did the High Court hold?

The High Court held that the learned counsel for the revenue conceded that the issue was covered against the revenue and in favour of the assessee by the Supreme Court's judgment in Allied Motors (P) Limited v. Commissioner of Income Tax (1997) 224 ITR 677. Following this Supreme Court judgment, and a prior decision of the High Court itself in ITR No. 94 of 1996 (The Commissioner of Income tax (C), Ludhiana v. M/s Avery Cycle Inds. Pvt. Limited, Ludhiana) dated 5.9.2006, the question of law was answered against the revenue and in favour of the assessee. The ITAT's deletion of the addition of Rs. 51,437/- was upheld. The ratio decidendi is that amended provisions of Section 43B, which are prospective, cannot be applied to assessment years prior to their effective date, and any deduction for statutory liabilities must be allowed in the year of payment, not accrual, if the amended provision is wrongly applied retrospectively.

What were the facts?

The Commissioner of Income Tax, Jalandhar (Revenue) filed an Income Tax Reference (ITR) No. 126 of 1996 before the High Court of Punjab and Haryana at Chandigarh. The reference arose from an order dated 20.12.1994 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, in I.T.A. No. 236(ASR)/1990. The assessment year in question was 1987-88. The dispute concerned the deletion of an addition of Rs. 51,437/- by the ITAT. The procedural history indicates that the ITAT's order was challenged by the Revenue through this reference.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal is right in law in deleting the addition of Rs. 51,437/- by applying the amended provisions of section 43B of the Income-tax Act to the proceedings relating to the assessment year 1987-88 when the amendment was effected from 1.4.1988? Contentions: Assessee: Not recorded in the judgment. Revenue: The learned counsel for the revenue conceded that the issue is covered against the revenue and in favour of the assessee by the judgment of the Hon'ble Supreme Court in Allied Motors (P) Limited v. Commissioner of Income Tax (1997) 224 ITR 677.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.R. Nos.126 of 1996 Date of decision: 22.11.2006 The Commissioner of Income Tax, Jalandhar. ---Applicant Vs. Smt. Paramjit Kaur, Jalandhar. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Dr. N.L. Sharda, Advocate for the revenue. -----

ORDER: Following question of law has been referred for opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, arising out of its order dated 20.12.1994 in I.T.A. No.236(ASR)/1990 in respect of assessment year 1987-88:- “Whether on the facts and in the circumstances of the case, the Ld. Income-tax Appellate Tribunal is right in law in deleting the addition of Rs. 51,437/- by applying the amended provisions of section 43B of the Income-tax Act to the proceedings relating to the assessment year 1987-88 when the amendment was effected from 1.4.1988?” It is fairly conceded by the learned counsel for the revenue that the issue is covered against the revenue and in favour of the assessee by the judgment of Hon’ble the Supreme Court in Allied Motors (P) Limited v. Commissioner of Income Tax

( 1997) 224 ITR 677. Following the above judgment of the Hon’ble Supreme Court, the issue has been decided against the revenue and in favour of the assessee vide

I.T.R. Nos.126 of 1996 order of this Court dated 5.9.2006 in ITR No.94 of 1996, The Commissioner of Income tax (C), Ludhiana v. M/s Avery Cycle Inds. Pvt. Limited, Ludhiana..

Accordingly, the question is answered against the revenue and in favour of the assessee. ( ADARSH KUMAR GOEL ) JUDGE November 22, 2006 ( RAJESH BINDAL ) ashwani JUDGE Pag e

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