CIT PANCHKULA vs. M/S HARYANA VIDYUT PRASARAN NIGAM LTD.

ITA-710-200 206

IN TH CIT Panchkul

M/s Haryana CORAM: H

H Present: M M M N

SANJEEV P

A Income Tax A whereby tw No.100/chd/2 the judgment Corporation L 9(O&M)

1 HE HIGH COURT OF PUNJA CHANDIGAR

Vs.

Vidyut Prasaran Nigam Ltd. **** HON’BLE MR. JUSTICE SAN HON’BLE MR. JUSTICE SAN **** Mr. Saurabh Kapoor, Sr. Standin Ms. Pridhi Sandhu, Jr. Standing C Ms. Muskaan Gupta, Advocate fo None for the respondent. *** RAKASH SHARMA, J.(Oral) Appellant assails the order da Appellate Tribunal, Chandigarh wo appeals bearing ITA N 008 for the assessment year 199 passed by this Court in case Ltd’, 295 ITR 510 (P&H), wher “(iii) That it was not d contributed to the provide the Provident Fund Act, disputed that the expe exclusively for the purpo AB AND HARYANA AT RH ITA-710-2009(O&M) Date of Decision: 05.12.2024 . . . . Appellant . . . Respondent NJEEV PRAKASH SHARMA NJAY VASHISTH ng Counsel and Counsel for the appellant. ) ated 31.03.2009 passed by the Bench ‘A’ (for short, ‘ITAT’), No. 78/chd/2008 and ITA 99-2000 were decided following of ‘CIT Vs. Punjab Financial rein this Court held as under: disputed that the assessee had ent fund for its employees under 1925. Further, it could not be ense was made wholly and ose of business and was neither

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ITA-710-200 2. While framed by thi 9(O&M)

2 capital in nature nor pers Act does not specifically contribution made under t only talks about grant recognized provident fu unrecognized provident fun admitting the appeal, followin s Court : “ (i) Whether on the fac the case, learned ITAT w the decision of Hon'ble Pu the case of CIT vs. Punj Reported in 295 ITR 51 addition of Rs.30,02,13 contributions to unreco unapproved pension fund, revenue that there was no by the assessee was as 1925? (ii) Whether on the fac the case, learned ITAT w ratio of the judgment of H case of Sony India P. Ltd. (Del.) in which it was expenditure of the nature d the Income Tax Act, 196 render nugatory the condi which the provisions of deductions envisaged there rsonal. Section 36(1) (iv) of the debar deduction on account of the Provident Fund Act, 1925. It of deduction in respect of und. The contribution to the nd was deductible.” ng questions of law have been cts and in the circumstances of as right in law in relying upon unjab & Haryana High Court in jab Financial Corporation Ltd. 10 (P & H) and deleting the 3,163/- made on account of ognised provident fund and ignoring the submission of the o proof that the impugned claim per the Provident Funds Act, cts and in the circumstances of was right in law in ignoring the Hon'ble Delhi High Court in the vs. CIT reported in 285 ITR 213 s held that allowance of an described in Section 36(1)(iv) of 61 under Section 37(1) would itions and limitations subject to f Section 30 to 36 make the ein admissible?

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ITA-710-200 3.

T Gujrat High C 398(Guj), tha therefore, be Corporation w The assessee assessee is fo framed by thi 4. With re aforesaid ques ‘Sony India expenditure w 5. We not to take notice Financial Co the Delhi Hig is a settled la 9(O&M)

3 (iii) Whether on the fac the case, learned ITAT wa order of CIT(A) that liabi account of electricity duty of allotment of equity s discharging of liability u/s requires that liability has assessee?” The ITAT vide its judgment also Court in case, ‘Decom Marketin at the contributions made to the P eligible for registration and was duly recognized by CIT vid had duly discharged its onu ound to have been allowed rightf s Court (i) is answered in favour egard to question No.(ii) it app stion of law based on the judgm P.Ltd Vs. CIT’, 285 ITR 213 while depositing amount in Prov tice that the judgment passed by of the judgment passed by this orporation (supra)’ and therefore gh Court and the same could not aw that earlier judgment passe cts and in the circumstances of as right in law in upholding the ility payable by the assessee on y payable can be set off by way hares and that it amounts to s 43B of the IT Act, 1961, which s to be "actually paid" by the o noticed the view taken by the ng Pvt. Ltd. Vs. CIT’, 251 ITR Provident Fund Act, 1925 would as the Trust of the assessee de its letter dated 23/27.09.1999. s, the appeal therefore of the fully and the question of law as r of assessee. pears that this Court framed the ment of Delhi High Court in case, 3 (Del), which held that such vident Fund, is not allowable. the Delhi High Court has failed Court in case ‘CIT Vs. Punjab e, a different view was taken by be binding upon this Court as it ed by this Court would have a

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ITA-710-200 binding prece other High Co Liquidator Vs “ S i c t m P t w m D S r P P a d a w o T n p t l c

Keepin the assessee a 9(O&M)

4 edential value over and above a ourt. The law has been settled by s. Dayanand’, 2008(10) SCC 1, “66. In State of Bihar v. Kali SCC 448], the Court elaborately ncuriam and held that the earli cannot be ignored by invoking th the only course open to the coo make a request for reference to Punjab v. Devans Modern Brew the Court reiterated that if a co with the principles of law enu matter has to be referred to a lar Dwaoodi Bohra Community v. S SCC 673], the Constitution B referred to various earlier Petroleum Corpn. Ltd. v. Mum Pradip Chandra Parija and othe and others (supra) and held t decision delivered by a Bench o any subsequent Bench of lesse would be inappropriate if a Divi overruling the decisions of Div The Court further held that such not only to the rule of disciplin precedents but it will also lead t the point of law; consistency and law and its contemporary statu casualty" ng in view thereto question No. ( and against the appellant. any different view taken by any y the Supreme Court in ‘Official wherein it was held as under: ika Kuer and others [2003 (5) y considered the principle of per ier judgment by a larger Bench he principle of per incuriam and ordinate or smaller Bench is to o the larger Bench. In State of weries Ltd. [2004 (11) SCC 26], oordinate Bench does not agree nciated by another Bench, the rger Bench. In Central Board of State of Maharashtra [2005 (2) Bench interpreted Article 141, judgments including Bharat mbai Shramik Sangha (supra), ers v. Pramod Chandra Patnaik that "the law laid down in a of larger strength is binding on er or co-equal strength and it ision Bench of two Judges starts vision Benches of three Judges. a practice would be detrimental ne and the doctrine of binding to inconsistency in decisions on d certainty in the development of us - both would be immediate (ii) is also answered in favour of

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ITA-710-200 6. As rega the assessee o shares and the 1961 is conce the revenue an “ w 1 3 t 2 w s G r 3 c r a b s g p a 9(O&M)

5 ards to question No.3, whether on account of treating as set off ereby discharging the liability un erned, we noticed that ITAT con nd observed as under: “Brief facts are that original r which was processed under se 18.12.2000. The assessee subse 30.3.2001. It was noticed by the the return, that there is an 27,04,46,079/- on account of el was asked to explain as to why th section 43B of the Act. The Government of Haryana release/allotment of equity of 5 30.3.1999 against electricity d company (copy of the letter da record which was duly considere authority). After adjustment a became recoverable from the shown in Schedule XIII. As per th granted as equity was to be adju payable to the Government of H account of electricity duty has the electricity duty payable by f by way of allotment of equity nder Section 43B of the IT Act, nsidered the appeal preferred by return was filed on 29.12.1999 ection 143(1)(a) of the Act on equently filed revised return on learned Assessing Officer, from un-discharged liability of Rs. lectricity payable. The assessee he same may not be added under e assessee claimed that the endorsed the sanction of 52.41 crores vide letter dated duty payable by the assessee ated 30.3.1999 is available on ed by the learned first appellate a sum for Rs. 16,95,53,921/- State government which was his letter, a sum of Rs. 44 crores usted against the electricity duty Haryana. Since, the liability on s been discharged by way of

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ITA-710-200 a t c o 7. Section as under: “ 4 o r 9(O&M)

6 allotment of shares, the case law therefore, are not applicable to consequently in our view, there order.” n 43B of the IT Act, 1961 as it s “Certain deductions to be only o 43B Notwithstanding anything c of this Act, a deduction otherwi respect of- (a) any sum payable by th cess or fee, by whatever n the time being in force, or (b) any sum payable by t way of contribution superannuation fund or g for the welfare of employee (c) any sum referred to in section 36, or (d) any sum payable by t loan or borrowing from an a State financial Corpo investment corporation, in ws relied upon by the Revenue, the facts of the present appeal, is no infirmity in the impugned stood at that relevant time, reads on actual payment contained in any other provision ise allowable under this Act in he assessee by way of tax, duty, name called, under any law for the assessee as an employer by to any provident fund or gratuity fund or any other fund es, or n clause(ii) of sub-section(1) of the assessee as interest on any ny public financial institution or oration or a State industrial n accordance with the terms and

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ITA-710-200 P p is a s w a a E t c 9(O&M)

7 conditions of the agreem borrowing, or (da) xxxx (e) any sum payable by loan or advances from a sc bank other than a primary primary co-operative agri bank in accordance with agreement governing such (f) any sum payable by t lieu of any leave at the cre (g) xxx (h) xxx Provided that nothing contain provisions of clause(h) shall app s actually paid by the assesse applicable in his case for furnish sub-section (1) of section 139 in which the liability to pay such and the evidence of such payme along with such return. Explanation 1-For the removal that where a deduction in resp clause(a) or clause(b) of this sec ment governing such loan or the assessee as interest on any cheduled bank or a co-operative y agricultural credit society or a icultural and rural development the terms and conditions of the h loan or advances, or the assessee as an employer in edit of his employee, or ed in this Section except the ply in relation to any sum which ee on or before the due date hing the return of income under n respect of the previous year in sum was incurred as aforesaid ent is furnished by the assessee l of doubts, it is hereby declared pect of any sum referred to in ction is allowed in computing the

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ITA-710-200 i p t w t S p E m a s r E t c t a t w t s p E t 9(O&M)

8 ncome referred to in Section 28 previous year relevant to the as the 1st day of April, 1983, or an which the liability to pay such su the assessee shall not be entitle Section in respect of such sum i previous year in which the sum is Explanation 2- For the purpose material times, “any sum payab assessee incurred liability in the sum might not have been paya relevant law. Explanation 3- For the removal that where a deduction in resp clause(c) or clause (d) of this s the income referred to in section a previous year relevant to the a the 1st day of April, 1988, or a which the liability to pay such su the assessee shall not be entitle section in respect of such sum i previous year in which the sum is Explanation 3A-For the remova that where a deduction in resp 8 of the previous year (being a ssessment year commencing on ny earlier assessment year) in um was incurred by the assessee, ed to any deduction under this in computing the income of the s actually paid by him. es of clause(a), as in force at all ble” means a sum for which the previous year even though such able within that year under the l of doubts it is hereby declared pect of any sum referred to in section is allowed in computing n 28 of the previous year (being assessment year commencing on any earlier assessment year) in um was incurred by the assessee, ed to any deduction under this in computing the income of the s actually paid by him. l of doubts, it is hereby declared pect of any sum referred to in

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ITA-710-200 c r y o l a i y E E t c r y o l a i y E d u h w 9(O&M)

9 clause(e) of this section is allo referred to in section 28 of the p year relevant to the assessment y of April, 1996, or any earlier liability to pay such sum was assessee shall not be entitled to a n respect of such sum in compu year in which the sum is actually Explanation 3AA xxxxxx Explanation 3B-For the remova that where a deduction in resp clause (f) of this section is allo referred to in section 28, of the p year relevant to the assessment y of April, 2001, or any earlier a liability to pay such sum was assessee shall not be entitled to a n respect of such sum in compu year in which the sum is actually Explanation 3C- For the rem declared that a deduction of an under clause (d) of this section, has been actually paid and any in which has been converted into a owed in computing the income previous year (being a previous year commencing on the 1st day assessment year) in which the incurred by the assessee, the any deduction under this section uting the income of the previous y paid to him. l of doubts, it is hereby declared pect of any sum referred to in owed in computing the income, previous year (being a previous year commencing on the 1st day assessment year) in which the incurred by the assessee, the any deduction under this Section uting the income of the previous y paid by him. moval of doubts, it is hereby ny sum, being interest payable shall be allowed if such interest nterest referred to in that clause loan or borrowing or debenture

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ITA-710-200 o t E E d u h w o t E 9(O&M)

10 or any other instrument by which to a future date shall not be deem Explanation 3CA-xxxxx Explanation 3D- For the rem declared that a deduction of an under clause(e) of this section, s has been actually paid and any in which has been converted into a or any other instrument by which to a future date shall not be deem Explanation 4- For the purpose (a) “public financial instit assigned to it in section 4A of 1956); (aa) “scheduled bank” sh to it in the Explanation to of section 11; (b) “State financial corp corporation established un an institution notified un Financial Corporation Act (c) “State industrial inve Government company wit of the Companies Act, 19 h the liability to pay is deferred med to have been actually paid. moval of doubts, it is hereby ny sum, being interest payable shall be allowed if such interest nterest referred to in that clause a loan or advance or debenture h the liability to pay is deferred med to have been actually paid. e of this section,- tutions” shall have the meaning A of the Companies Act, 1956 (1 hall have the meaning assigned o clause (iii) of Sub Section (5) poration” means a financial nder Section 3 or Section 3A or nder Section 46 of the State t, 1951 (63 of 1951); estment corporation” means a thin the meaning of section 617 956 (1 of 1956), engaged in the

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ITA-710-2009(O&M)

11 business of providing lo projects and eligible for d sub-section (1) of section 3 (d) “co-operative bank”, society” and “primary rural development bank respectively assigned to th section (4) of section 80 P; (e) xxxx (f) “non-banking financi meaning assigned to it in Reserve Bank of India Act, (g) “systemically impor banking financial comp financial company which public deposits and havin five hundred crore rupees sheet and is registered w under the provisions of th 1934 (2 of 1934) Following clause(g) shall clause (g) of Explanati Fianance Act, 2023, w.e.f. (g) xxxxx ng-term finance for industrial deduction under clause (viii) of 36; , “primary agricultural credit co-operative agricultural and k” shall have the meanings hem in the Explanation to sub- ; ial company” shall have the clause (f) of section 45-I of the , 1934 (2 of 1934); rtant non-deposit taking non- pany” means a non-banking h is not accepting or holding ng total assets of not less than as per the last audited balance with the reserved Bank of India he Reserved Bank of India Act, l be substituted for the existing ion 4 to section 43B by the f. 1-4-2024:

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ITA-710-200 E The wo while the exp allowable. 8. Thus, a discharged to from the allot to the said ex part of the fun said to have b in terms of Se is hereby dism 9.

December 05, rashmi 1. Whethe 2. Whethe 9(O&M)

12 Explanation 5-xxxx” ord ‘actually paid’ has been, ther planation lays down circumstan as per the revised return filed wards the Government relating tment of equity of Rs. 52.41 cro xtent, the same was adjusted i.e. nds allotted by the Government been acquired from other source ection 43 (d) of the IT Act, 1961 missed. All pending applications also stan

(SANJ 2024 r speaking/reasoned?

Y r reportable?

Y refore, used only in the proviso, nces where the deduction is not d by the assessee, the liability to Electricity duty was payable ores by Government of Haryana Rs.44 Crores. The shares being of Haryana, the same cannot be es and was therefore, allowable 1, accordingly the present appeal nd disposed of accordingly. JEEV PRAKASH SHARMA) JUDGE

(SANJAY VASHISTH) JUDGE Yes/No Yes/No

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