Commissioner Of Income Tax-Ii vs. Siddharth Tubes Ltd.

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ITA/3/2009HC Madhya Pradesh19 February 2014Bench: HON'BLE THE CHIEF JUSTICE3 pages
For Petitioner: Ku.Veena Mandlik/For Respondent: Shrikrishna Jain,Jk Jain,As Parihar
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that no substantial question of law arises in this appeal. The legal position regarding the deductibility of provident fund payments made before filing the return, especially for periods prior to the amendment of Section 43B, has been expounded by the Apex Court in the cases of Commissioner of Income Tax Vs. Vinay Cement Ltd. and Commissioner of Income Tax Vs. George Williamson (Assam) Ltd. The Tribunal found no fault with the view taken by the Tribunal below in rejecting the Department's plea, aligning with the Apex Court's exposition. Regarding the third question formulated as a substantial question of law, the Tribunal held that it is covered by the decision of the Apex Court in J.K.Tobacco Products Pvt. Ltd. Vs. Commissioner of Income Tax. Therefore, no interference was warranted. The appeal was dismissed.

What were the facts?

The appeal was filed by the assessee against an order of the Income Tax Appellate Tribunal (Tribunal). The core of the dispute revolved around the applicability of Section 43B of the Income Tax Act, 1961, concerning the deduction of payments made towards provident fund. The assessee had paid the provident fund before filing the return for the assessment year 1996-97. The amendment to Section 43B, which clarified its application, came into effect from April 1, 2004. The Tribunal had rejected the plea of the Department. The judgment refers to various High Court decisions and Supreme Court pronouncements on the matter, including Commissioner of Income Tax Vs. Vinay Cement Ltd. and Commissioner of Income Tax Vs. George Williamson (Assam) Ltd.

What were the issues?

1. Whether the assessee is entitled to claim the benefit of Section 43B for the assessment year 1996-97, considering the payment of provident fund was made before filing the return, and the legal position prior to the amendment of Section 43B? Assessee's contention: The assessee relied on the Apex Court decisions in Commissioner of Income Tax Vs. Vinay Cement Ltd. and Commissioner of Income Tax Vs. George Williamson (Assam) Ltd., which held that an assessee is entitled to claim the benefit of Section 43B if the contribution to the provident fund is made before filing the return, particularly for periods prior to the amendment of Section 43B. Revenue's contention: The revenue's representative's plea was rejected by the Tribunal. The judgment notes that a Division Bench of the High Court in B.S.Patel Vs Deputy Commissioner of Income Tax opined that the amendment to Section 43B has prospective application. However, other High Courts, such as Madras in Commissioner of Income Tax Vs. Nexus Computer (P) Ltd., Delhi in Commissioner of Income Tax Vs. P.M.Electronics Ltd., and Karnataka in Vinay Cement Ltd., have taken a different view.

Which sections of the Income-tax Act were involved?

Section 43B

AI-generated summary — verify with the full judgment below

1 I.T.A.No.3/2009 19.02.2014 Shri R.L.Jain, Senior Advocate with Ms.Veena Mandlik, Advocate for the appellant. Shri S.K.Jain, Advocate for the respondent. Heard counsel for the parties. In all three questions have been posed in this appeal as substantial questions of law. The substance of the issues raised revolves around the application of the decisions of the Apex Court in Commissioner of Income Tax Vs. Vinay Cement Ltd., (2007) 213 CTR (SC) 268, and another decision in the case of Commissioner of Income Tax Vs. George Williamson (Assam) Ltd., (2006) 284 ITR 619 (Gau). In these decisions the Apex Court after considering the amended provision held that the assessee was entitled to claim the benefit of section 43B for the relevant period, particularly, in view of the fact that he has contributed to provident fund before filing of the return. That legal position is applicable to cases covered by section 43B prior to its amendment. Even in the present case, the assessee had paid the provident fund prior to filing of his return for the assessment year 1996-97. The amendment in section 43B was brought into force from 1.4.2004. Nodoubt, the Division Bench of this court in the case of B.S.Patel Vs Deputy Commissioner of 2 Income Tax, ITA No.67/2004 decided on 16.11.2007, has opined that the said amendment has prospective application. However, keeping in mind the exposition of the Apex Court and as applied to the case on hand, no fault can be found with the view taken by the Tribunal rejecting the plea taken by the Department's representative. Notably, the Madras High Court in the case of Commissioner of Income Tax Vs. Nexus Computer (P) Ltd., (2008) 219 CTR (Mad) 54, has opined that the decision of the Apex court in Vinay Cement (supra) is a speaking judgment while upholding the opinion of the High Court given in the said case. The respondents have also placed reliance on the decision of Delhi High Court in the case of Commissioner of Income Tax Vs. P.M.Electronics Ltd., (2008) 220 CTR (Del) 635 and Karnataka High Court in the case of Vinay Cement Ltd. (supra), which appear to have taken view different than the one taken by the Division Bench of this High court in B.S.Patel (supra). Suffice it to observe that no substantial question of law arises as the legal position is already expounded by the Apex Court in the case of George Williamson (supra) and Vinay Cement Ltd. (supra). As regards the third question formulated as substantial question of law, the same is also covered by the decision of the Apex Court in J.K.Tobacco Products 3 Pvt. Ltd. Vs. Commissioner of Income Tax, (1998) 229 ITR 123 (MP). In the circumstances, no interference is warranted. Dismissed. (A.M.Khanwilkar) (J.K.Maheshwari) Chief Justice Judge HS

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