First Flight Couriers Ltd v. The Dy. Commissioner Of Income Tax,Circle – 4(2), Mumbai

SNC IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGNAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 792 OF 2009WITHINCOME TAX APPEAL NO. 837 OF 2009 First Flight Couriers Ltd. ..Appellant versus The Dy. Commissioner of Income Tax,Circle – 4(2), Mumbai ..Respondent. Mr. Vipul B. Joshi for the Appellant.Mr. Vimal Gupta for the Respondent. ............. CORAM : S.J.VAZIFDAR &M.S. SANKLECHA, JJ. DATE: 21 June 2012. P.C. : These two Appeals have been filed under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the said Act) against a common order dated 23.12.2008 passed by the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal) for the assessment years 2001-02 (previous year ending 31 March, 2001) and 2002-2003 (previous year ending 31 March 2002). The SNC appellant has raised the following identical questions of law in both the Appeals as substantial questions of law: 1)Whether, in the facts and circumstances of the case, and in law, the Tribunal was right in holding that the delay in making payments of employer’s contribution towards Provident Fund and ESIC beyond the due dates as provided under the respective statutes is not allowable u/s. 43 B of the Act, even though the amounts were deposited towards the respective funds before the due date of filing of return of income u/s. 139(1) of the Act? 2)Whether, on the facts and in the circumstances of the case and in law, the order of the Tribunal is perverse and bad in law inasmuch as no proper, effective and adequate opportunity of being heard was given to the appellant? 2The appeals are admitted on question no.1 above. At the request of Advocates for the Appellant and Respondent, both the Appeals are taken up for final disposal. SNC 3ITXA 792-09 with ITXA 837-09(final).doc deduction is available under Section 43B of the said Act in respect of delayed payments made to Provident Fund and Employees State Insurance Corporation (ESIC). The payments were made after the due date under the respective statutes. However, by virtue of an amendment made to Section 43B of the said Act by the Finance Act, 2003 a proviso was introduced by the Finance Act, 2003, which inter alia provided that where payments to PF and ESIC are made before the due date of filing the Income Tax return under Section 139(1) of the said Act for the previous year in which the payment was made then deduction under Section 43B of the said Act is allowed. 4The Supreme Court in the matter of CIT V/s. Alom Extrusion reported in 319 ITR page 306 has held that the amendment by the Finance Act, 2003 would operate retrospectively from 01.04.1988 as amendment was curative in nature. Consequently, the Appellants are entitled to the benefit of Section 43B of the said Act in respect of payments made towards P.F. and ESIC beyond the due dates provided under the respective Acts, but, before filing of return of income under Section 139(1) of the said Act. Both the Advocates for Appellant and for Respondent are agreed that the question of law is covered by the decision of the Supreme Court in the matter of Alom Extrusion (Supra). 5In view of the above, question No.1 is answered in the negative i.e. in favour of the Appellant/Assessee and against the Respondent. 6Both the Appeals are disposed of. No order as to costs. (M.S. SANKLECHA, J.) (S.J.VAZIFDAR J.)