M/S Ssp Ltd v. Commissioner Of Income Tax, Faridabad

ITA No. 486 of 2007 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 486 of 2007 Date of Decision: 9.12.2010 M/s SSP Ltd. Versus Commissioner of Income Tax, Faridabad ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Jyoti, Advocate for the appellant. Ms. Urvashi Dhugga, Advocate for the respondent. AJAY KUMAR MITTAL, J. 1.This Court vide order dated 5.8.2008 while admitting theappeal had framed the following substantial questions of law fordetermination:- “Whether on the facts and in the circumstances ofthe case, the omission of second proviso to Section43B of the Income Tax Act, 1961 by the Finance Act,2003 with effect from 1.4.2004, will haveretrospective operation?” 2.The facts necessary for adjudication as narrated in theinstant appeal are that the assessee filed its return on 29.11.2001 for the assessment year 2001-02 declaring an income of Rs.5,46,966/-.The said return was processed under Section 143(1)(a) of the IncomeTax Act, 1961 (in short “the Act”) and thereafter notice under Section143(2) was issued to the assessee along with detailed questionnaire towhich the assessee filed written submissions and attended theproceedings. The Assessing Officer denied the statutory benefit ofdeduction of Provident Fund and ESI to the assessee holding thatbenefit in respect of the amounts not paid within due dates under therespective Acts was to be disallowed under Section 43B of the Act.Feeling aggrieved, the assessee filed an appeal and the Commissionerof Income Tax (Appeals) upheld the order of the Assessing Officer. Onfurther appeal by the assessee, the Tribunal dismissed the appeal.Hence, the present appeal by the assessee. 3.We have heard learned counsel for the parties. 4.The point for consideration in this appeal is whether theomission of second proviso to Section 43B of the Income Tax Act, 1961by the Finance Act, 2003 w.e.f. 1.4.2004, would have retrospectiveoperation. 5.The matter is no longer res integra.The Hon'ble SupremeCourt in Commissioner of Income Tax v. Alom Extrusions Ltd.[2009] 319 ITR 306 (SC) has held that the omission of the secondproviso to Section 43B of the Act, by the Finance Act, 2003 operatedretrospectively with effect from April 1, 1988 and not prospectively fromApril 1, 2004 as the amendment was to remove the difficulties whichwere there in the existing provision of Section 43B of the Act. Thecontrary view taken by the Tribunal, thus, cannot be sustained. ITA No. 486 of 2007 -3- 6.In view of the above, the appeal stands allowed and thesubstantial question of law is answered in favour of the assessee. (AJAY KUMAR MITTAL) JUDGE December 9, 2010gbs (ADARSH KUMAR GOEL)JUDGE