CIT vs. RAMESHWAR LAL

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ITR/46/1996HC Punjab & HaryanaPHHC01035017199602 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 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, reported in 1997 (224) ITR 677. Following this Supreme Court precedent, the High Court had previously decided a similar issue against the revenue and in favour of the assessee in its order dated September 5, 2006, in ITR No.94 of 1996, The Commissioner of Income tax (C), Ludhiana v. M/s Avery Cycle Inds. Pvt. Limited, Ludhiana. Therefore, the question of law referred to the High Court is answered against the revenue and in favour of the assessee. The operative direction is to answer the question in favour of the assessee.

What were the facts?

This case involves an Income Tax Reference (ITR) filed by the Commissioner of Income Tax (Central), Ludhiana (the revenue) against Shri Rameshwar Lal Soni (the assessee) for the assessment year 1984-85. The reference arises from an order passed by the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, dated December 16, 1994, in I.T.A. No.1632(ASR)/1989. The ITAT had deleted an addition of Rs.61,594/- made by the revenue under Section 43B of the Income Tax Act, 1961, holding that the amended provisions of this section, effective from April 1, 1988, had retrospective application. The High Court of Punjab and Haryana at Chandigarh is considering the question of law referred by the ITAT.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in deleting the addition of Rs.61,594/- made u/s 43B of the Act holding that the amended provisions of this section w.e.f. 1.4.1988 have retrospective application? The revenue's contention, implied by filing the reference, is that the ITAT erred in applying the amended provisions of Section 43B retrospectively. The assessee's position, as indicated by the ITAT's deletion, is that the amended provisions should indeed be applied retrospectively. The High Court's decision hinges on the retrospective applicability of the amended Section 43B.

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. No.46 of 1996 Date of decision: 02.11.2006 The Commissioner of Income Tax (Central), Ludhiana. ---Applicant Vs. Shri Rameshwar Lal Soni, Kapurthala. -----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON'BLE MR JUSTICE RAJESH BINDAL Present: Mr. S.K. Garg Narwana, 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 16.12.1994 in I.T.A. No.1632(ASR)/1989 in respect of assessment year 1984-85:- “Whether, on the facts and in the circumstances of the case, the I.T.A.T. was right in law in deleting the addition of Rs.61,594/- made u/s 43B of the Act holding that the amended provisions of this section w.e.f. 1.4.1988 have retrospective application?” We find that the issue is covered against the revenue and in favour of the assessee by the judgment of Hon’ble 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, we have decided the issue against the revenue and in favour of the assessee vide our order 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 02, 2006 ( RAJESH BINDAL ) ashwani JUDGE

I.T.R. No.48 of 1993 Pag e

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