COMMISSIONER OF INCOME TAX-I vs. APEX ELECTRICALS LTD.

O/TAXAP/542/2007 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 542 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 ? ================================================================ COMMISSIONER OF INCOME TAX-I....Appellant(s) Versus APEX ELECTRICALS LTD.....Opponent(s) ================================================================ Appearance: MR KM PARIKH, ADVOCATE for the Appellant(s) No. 1 RULE SERVED for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Date : 23/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. This is an appeal by the appellant- Revenue, seeking to challenge the order of the Page 1 of 5

O/TAXAP/542/2007 JUDGMENT learned ITAT, Ahmedabad Bench ‘D’ (for short, ‘the Tribunal’), Dated : 04.08.2006, rendered in ITA No. 1939/Ahd/2002 for the A.Y. 1998-99. 2. The brief facts leading to the filing of the present appeal are that the assessee- respondent, herein, filed its return on income on 30.11.1998, declaring its total income at Rs.1,25,64,890/-. It appears that, thereafter, the case of the assessee came to be processed and examined and the concerned AO made certain additions / disallowances to the income of the assessee. The assessee, therefore, approached the learned CIT(A), who partly allowed the appeal of the assessee. Being aggrieved and dissatisfied with the same, the Revenue carried the matter before the Tribunal, wherein, the Tribunal passed the impugned order. Hence, the present appeal. 3. At the time of admission, this Court framed the following question of law for consideration; “Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing deduction u/s.43B(b) in respect of the payments made to provident and other funds beyond the due dates under the relevant Acts, by holding the amendment made in section 43B by the Finance Act, 2003, w.e.f. 01-04-2004, omitting the second proviso

section

43B

as retrospective?” Page 2 of 5

O/TAXAP/542/2007 JUDGMENT 4. At the very outset, Mr. Parikh, learned Advocate for the appellant-Revenue, invited our attention to a decision of the Apex Court in “CIT VS. ALOM EXTRUSIONS LTD.”, 319 ITR 306, wherein, the Apex Court, while answering the question raised in that matter in favour of the assessee, therein, in similar circumstances, has observed and held as under; “The omission of the second proviso to Section 43B of the Income Tax Act, 1961, by the Finance Act, 2003, operated retrospectively, with effect from April 1, 19988 and not prospectively from April 1, 2004. Earlier, under the second proviso to Section 43B, as amended by the Finance Act, 2003, assesses were entitled to deduction only if the contributions stood credited on or before the due date given in the Provident Fund Act. This created further difficulties and on representation made to the Finance Ministry, one more amendment was made by the Finance Act, 2003. Though, this amendment was made applicable with effect from April 1, 2004, the amendment was creative in nature and applied retrospectively with effect from April 1, 1988. That a proviso in a section is inserted to remedy the unintended consequences and to make the section workable, a proviso which supplies an obvious omission is required to be read retrospectively

operation, particularly, to given effect to the Page 3 of 5

O/TAXAP/542/2007 JUDGMENT section as a whole.” 5. In view of the observations made by the Apex Court in “CIT VS. ALOM EXTRUSIONS LTD.” (Supra), Mr. Parikh fairly conceded that the question framed in this appeal requires to be answered in favour of the assessee. 6. Though served, none appears on behalf of the respondent-assessee. 7. Since, the question raised in this appeal has already been answered in favour of the assessee by the Apex Court vide its decision in “CIT VS. ALOM EXTRUSIONS LTD.”, wherein, it has given detailed findings on the issue, we do not propose to elaborate the same and the present appeal deserves to be dismissed. 8. In the result, present appeal is dismissed. We hold that the Tribunal was right in law in allowing deduction u/s.43B(b) in respect of the payments made to provident and other funds beyond the due dates under the relevant Acts, by holding the amendment made in section 43B by the Finance Act, 2003, w.e.f. 01-04-2004, omitting the second proviso to section 43B as retrospective. The question framed in this appeal is answered in favour of the assessee and against the Revenue, accordingly. Page 4 of 5

O/TAXAP/542/2007 JUDGMENT (K.S.JHAVERI, J.) (K.J.THAKER, J) UMESH Page 5 of 5