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Commissioner of Income-tax, Circle -I, Kolkata v. Vijay Shree Ltd.
Factual and Procedural Background
This appeal was filed by the Revenue against an order dated 28 April 2011 passed by the Income Tax Appellate Tribunal ("A" Bench, Kolkata) in ITA No.1091/Kol./2010 relating to assessment year 2006-07. The Assessing Officer had made an addition on account of Employees' Contribution to ESI and Provident Fund by invoking the provision of Section 36(1)(va), read with section 2(24)(x) of the Income Tax Act. The Tribunal dismissed the Revenue's appeal and deleted that addition, relying on the Supreme Court decision in CIT v. Alom Extrusion Ltd. [2009] 319 ITR 360/185 Taxman 416. Dissatisfied, the Revenue brought the present appeal to the court that issued this order.
Legal Issues Presented
- Whether deletion of the addition made by the Assessing Officer on account of Employees' Contribution to ESI and PF (by invoking Section 36(1)(va) read with section 2(24)(x) of the Act) was correct.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| CIT v. Alom Extrusion Ltd. [2009] 319 ITR 360/185 Taxman 416 | The Supreme Court held that the amendment to the second proviso to sec 43B of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April, 1988. | The court applied this holding to conclude that deletion of the amount paid by the Employees' Contribution beyond the due date was deductible by invoking the amended provisions of section 43B; this supported dismissal of the Revenue's appeal. |
Court's Reasoning and Analysis
The court heard the appellant's counsel and analyzed the controlling Supreme Court authority cited by the Tribunal. It noted the Supreme Court's explicit conclusion that the amendment to the second proviso to section 43B (introduced by Finance Act, 2003) was curative and retrospective from 1 April 1988. On that basis the court determined that amounts representing Employees' Contribution paid after the due date were deductible under the amended section 43B. Because the Tribunal's deletion of the Assessing Officer's addition was consistent with the Supreme Court's ruling, the court found no substantial question of law arising from the Revenue's appeal.
Holding and Implications
APPEAL DISMISSED
Consequences: The Revenue's appeal is dismissed and the Tribunal's deletion of the addition relating to Employees' Contribution to ESI and PF stands. The court concluded that no substantial question of law was involved. The opinion applies the existing Supreme Court authority described above and does not purport to establish a new legal precedent beyond that application.
ORDER
1. This appeal is at the instance of the Revenue and is directed against an order dated 28th April, 2011 passed by the Income Tax Appellate Tribunal, "A" Bench, Kolkata in ITA No.1091/Kol./2010l relating to assessment year 2006-07 by which the Tribunal dismissed the appeal preferred by the Revenue against the order of CIT(A).
2. The only issue involved in this appeal is as to whether the deletion of the addition by the Assessing Officer on account of Employees 'Contribution to ESI and PF by invoking the provision of Section 36(l)(va), read with section 2(24)(x) of the Act was correct or not.
3. It appears that the Tribunal below, in view of the decision of the Supreme Court in the case of CIT v. Alom Extrusion Ltd. [2009] 319 ITR 360/185 Taxman 416 held that the deletion was justified.
4. Being dissatisfied, the Revenue has come up with the present appeal.
5. After hearing Mr. Sinha, learned advocate, appearing on behalf of the appellant and after going through the decision of the Supreme Court in the case of Alom Extrusion Ltd. (supra), we find that the Supreme Court in the aforesaid case has held that the amendment to the second proviso to the sec 43B of the Income Tax Act, as introduced by Finance Act, 2003, was curative in nature and is required to be applied retrospectively with effect from 1st April, 1988.
6. Such being the position, the deletion of the amount paid by the Employees' Contribution beyond due date was deductible by invoking the aforesaid amended provisions of section 43B of the Act.
7. We, therefore, find that no substantial question of law is involved in this appeal and consequently, we dismiss this appeal.
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