THE COMMISSIONER OF INCOME TAX- I, vs. DEEPAK PETROCHEM LTD.

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TAXAP/1444/2007HC GujaratGJHC24041310200711 December 2014Bench: HONOURABLE MR. JUSTICE KS JHAVERI,HONOURABLE MR. JUSTICE K.J.THAKER3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the revenue on the ground of the smallness of the amount involved, noting that the revenue effect was less than Rs. 1 lakh. The Court referred to CBDT Instruction No. 1979 dated 27th March, 2000 and 02 of 2005, which suggest that appeals should not be filed where the total revenue effect is less than Rs. 1 lakh. Consequently, the questions of law were answered in favour of the assessee and against the revenue. The appeal was not entertained on its merits, and no specific finding was given on the interpretation of section 43B or the retrospective nature of the omission of the second proviso. Liberty was granted to the revenue to revive the appeal in case of difficulty.

What were the facts?

The Commissioner of Income Tax-I (appellant-revenue) filed an appeal challenging an order dated 26.09.2006 passed by the Income-tax Appellate Tribunal (ITAT), Ahmedabad Bench ‘A’. The ITAT's order was in relation to ITA No. 652/Ahd/2002 for the assessment year 1997-98. The appeal was admitted by the High Court on 17.01.2008, and a substantial question of law was framed. The dispute pertains to the deletion of disallowance made under sections 43B and 36(1)(va) by the Tribunal, concerning the belated payment of Provident Fund (PF). The High Court noted that the revenue effect was less than Rs. 1 lakh.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the disallowance made under sections 43B and 36(1)(va) by holding the omission of the second proviso to section 43B w.e.f. 01.04.2004 as clarificatory and hence retrospective, thereby allowing the claim of belated payment of PF? Assessee's Contention: The assessee argued that the omission of the second proviso to section 43B from 01.04.2004 was clarificatory and retrospective, justifying the allowance of the claim for belated PF payment. Revenue's Contention: The revenue contended that the Tribunal erred in deleting the disallowance made under sections 43B and 36(1)(va) and in treating the omission of the proviso as retrospective.

Which sections of the Income-tax Act were involved?

Section 43B,Section 36(1)(va)

AI-generated summary — verify with the full judgment below

O/TAXAP/1444/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1444 of 2007

FOR APPROVAL AND SIGNATURE:

HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ THE COMMISSIONER OF INCOME TAX- I,....Appellant(s) Versus DEEPAK PETROCHEM LTD.....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 MRS SWATI SOPARKAR, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER

Date : 11/12/2014

Page 1 of 3

O/TAXAP/1444/2007 JUDGMENT ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of this appeal, the appellant-revenue has challenged the order dated 26.09.2006 passed by the Income-tax Appellate Tribunal, Ahmedabad Bench ‘A’ in ITA No. 652/Ahd/2002 for the assessment year 1997-98. 2. While admitting this appeal on 17.01.2008, this Court has framed the following substantial question of law: “Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the disallowance made u/s. 43B and 36(1) (va) by holding the omission of the second proviso to section 43B w.e.f 01.04.2004 as clarificatory and hence retrospective and thereby allowing the claim of belated payment of P.F.?” 3. In our view, the amount involved in the present case is a small one and the revenue effect is less than Rs. 1 lakh, and therefore, as per CDBT Instruction No. 1979 dated 27th March, 2000 and 02 of 2005, the revenue ought not to have come in appeal where the total revenue effect is less than Rs. 1 lakh, and therefore, this appeal is not entertained. The questions are answered in favour of the assessee and against the revenue. This appeal is dismissed on the ground of smallness of amount. Liberty to revive in case of difficulty. Page 2 of 3

O/TAXAP/1444/2007 JUDGMENT (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 3 of 3

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