So Far As The Substantial Question No.[A] Is Concerned, The Same Is Squarelycovered By The Decision Of This Court In The Case Of Principal Commissioner Of Incom v. Krishi Rasayan Exports [P] Ltd.; [2022] 145 Taxmann.com 191 [Cal]. Theoperative Portion Of The Decision Reads As Follows

OD–2 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/44/2023IA NO:GA/1/2023, GA/2/2023PRINCIPAL COMMISSIONER OF INCOME TAX KOLKATA-2,KOLKATAVS. SHANTINATH DETERGENTS PVT. LTD. BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 27[th] March, 2023 Appearance :Mr. Smarajit Roy Cowdhury, Adv.Mr. Soumen Bhattacharyya, Adv.…for appellantMr. Abhrotosh Mazumder, Sr. Adv.,Ms. Swapna Das, Adv.Mr. Siddharth Das, Adv.…for respondent The Court : - There is a delay of 803 days in filing the appeal. Though theexplanation given in the affidavit in support of the petition is not fully satisfactory sincethis appeal has been filed under section 260A of the Income Tax Act, 1961, we arerequired to see as to whether any substantial question of law arises for consideration. For such reason, we exercise discretion and condone the delay in filing theappeal. The application, GA/1/2023 is allowed. This appeal filed by the revenue under section 260A of the Income Tax Act, 1961[the Act] is directed against the order dated 20.3.2020 passed by the Income TaxAppellate Tribunal, Kolkata “C” Bench, Kolkata in IT A No.27 to 32/Kol/2019 for theassessment year 2009-10 to 2013-14 and 2015-16. The revenue has raised thefollowing substantial questions of law for consideration: - a)Whether the Learned Tribunal has committed substantial error in law inupholding the decision of the Learned CIT(A) of admitting the grounds ofappeal for the first time relating to taxability of sales tax subsidy which hadbeen already offered for taxation by the assessee in its return of income, whenthe facts relating to the same were not available on records and thus denyingthe Assessing Officer any scope to examine the issue which involves a mixedquestion of law and fact and the order of the Learned Tribunal suffers byperversity ?upholding the decision of the Learned CIT(A) of admitting the grounds ofappeal for the first time relating to taxability of sales tax subsidy which hadbeen already offered for taxation by the assessee in its return of income, whenthe facts relating to the same were not available on records and thus denyingthe Assessing Officer any scope to examine the issue which involves a mixedquestion of law and fact and the order of the Learned Tribunal suffers byperversity ? b)Whether the Learned Tribunal has committed substantial error in law inholding that the employees contributions to PF and ESI are governed by theprovisions of Section 43B of the Income Tax Act, 1961 while the same isseparately dealt in section 36(va) of the Income Tax Act, and the declaratoryexplanation introduced in the Finance Bill, 2021 at clauses 8 and 9 of theBill?holding that the employees contributions to PF and ESI are governed by theprovisions of Section 43B of the Income Tax Act, 1961 while the same isseparately dealt in section 36(va) of the Income Tax Act, and the declaratoryexplanation introduced in the Finance Bill, 2021 at clauses 8 and 9 of theBill? We have heard learned Advocates for the parties. So far as the substantial question no.[a] is concerned, the same is squarelycovered by the decision of this Court in the case of Principal Commissioner of IncomeTax vs. Krishi Rasayan Exports [P] Ltd.; [2022] 145 taxmann.com 191 [Cal]. Theoperative portion of the decision reads as follows :- “4.The substantial question of law involved in this appeal is squarelycovered in favour of the assessee and against the revenue in the light ofthe decision of the Hon’ble Supreme Court in CIT vs. M/s. ChaphalkarBrothers [2017] 88 taxmann.com 178/[2018] 252 Taxman 360/400 ITR279. The operative portion of the judgment reads as follows :- “After setting out both the Supreme court judgements referred tohereinabove, the High Court found that the concessions were issued inorder to achieve the twin objects of acceleration of industrial development “4.The substantial question of law involved in this appeal is squarelycovered in favour of the assessee and against the revenue in the light ofthe decision of the Hon’ble Supreme Court in CIT vs. M/s. ChaphalkarBrothers [2017] 88 taxmann.com 178/[2018] 252 Taxman 360/400 ITR279. The operative portion of the judgment reads as follows :- “After setting out both the Supreme court judgements referred tohereinabove, the High Court found that the concessions were issued inorder to achieve the twin objects of acceleration of industrial development in the State of Jammu and Kashmir and generation of employment in thesaid State. Thus considered, it was obvious that the incentives would haveto be held capital and not revenue. Mr. Ganesh, learned Senior Counsel,pointed out that by an order dated 19.04.2016, this Court stated that theissue raised in those appeals was covered, inter alia, by the judgment inPonni Sugars, and the appeals were, therefore, dismissed. We have no hesitation in holding that the finding of the Jammu andKashmir High Court on the facts of the incentive subsidy contained in thatcase is absolutely correct. In that once the object of the subsidy was toindustrialize the State and to generate employment in the State, the factthat the subsidy took a particular form and the fact that it was grantedonly after commencement of production would make no difference.” 5.Identical issue was also considered by this Court in the case ofPr.CIT vs. Ankit Metal And Power Ltd., [2019] 109 taxmann.com93/266 Taxman 237/416 ITR 591 (Cal)wherein apart fromconsidering the effect of the subsidy, the Court also considered as towhether when a receipt is not in the character of income as definedunder Section 2(24) of the Act, whether it can be said to form part ofthe book profit under Section 115 JB. The said question wasanswered in favour of the revenue in the following terms :- “31. In this case since we have already held that in the relevantassessment year 2010-11 the incentives “interest subsidy” and “powersubsidy” is a “capital receipt” and does not fall within the definition of“income” under section 2(24) of the Income-tax Act, 1961 and when areceipt is not in the character of income it cannot form part of the bookprofit under section 115JB of the Act, 1961. In the case of Apollo TyresLtd. (supra) the income in question was taxable but was exempt under aspecific Provision of the Act as such it was to be included as a part of thebook profit. But where a receipt is not in the nature of income at all, it cannot be included in the book profit for the purpose of computationunder section 115JB of the Income-tax Act, 1961. For the aforesaidreason, we hold that the interest and power subsidy under the schemes inquestion would have to be excluded while computing book profit undersection 115JB of the Income-tax Act, 1961. The third issue involved in theinstant appeal which requires adjudication is whether the action of theTribunal entertaining/allowing the claim which was made by the assesseebefore the Assessing Officer by filing a revised computation instead offiling a revised return since the time to file the revised return had lapsed,for claiming to treat the incentive subsidies in question as capital receiptsinstead of revenue receipts as claimed in original return. The AssessingOfficer had denied this claim. The Revenue has attacked the order of theTribunal by relying on the decision in the case of Goetze (India) Ltd. v. CITreported in [2006] 284 ITR 323 (SC). This case does not help the Revenue/appellant. In this case, theSupreme Court has made it clear that its decision was restricted to thepower of the assessing authority to entertain a claim for deductionotherwise than by a revised return, and did not impinge on the power ofthe Appellate Tribunal under section 254 of the Income-tax Act, 1961.The Hon’ble Supreme Court in the said decision held as follows (page 324of 284 ITR): This case does not help the Revenue/appellant. In this case, theSupreme Court has made it clear that its decision was restricted to thepower of the assessing authority to entertain a claim for deductionotherwise than by a revised return, and did not impinge on the power ofthe Appellate Tribunal under section 254 of the Income-tax Act, 1961.The Hon’ble Supreme Court in the said decision held as follows (page 324of 284 ITR): “In the circumstances of the case, we dismiss the civil appeal. However, wemake it clear that the issue in this case is limited to the power of theassessing authority and does not impinge on the power of the Income-taxAppellate Tribunal under section 254 of the Income-tax Act, 1961.” This judgment was followed by our court in the case of CIT v.Britannia Industries Ltd. reported in [2017] 396 ITR 677 (Cal) holding thatthe Tribunal has the power to entertain the claim of deduction not claimedbefore the Assessing Officer by filing a revised return. Respectfullyfollowing the aforesaid decision as well as the view already taken by us inthis case that the aforesaid subsidies are capital receipt and not an“income” and not liable to tax, the Tribunal in exercise of its power undersection 254 of the Income-tax Act justified this claim though no revised return under section 39(5) of the Act was filed before the Assessing Officer.We answer both the question Nos. 1 and 2 in the negative and in favour ofthe assessee. Accordingly, the appeal of the Revenue is dismissed with no order asto cost.” 6.In the light of the above decisions, the substantial question of lawframed for consideration has to be answered against the revenue.” Thus, following the above decision, the substantial question of law [a] isanswered against the revenue. So far as the substantial question of law no.[b] is concerned, we have examinedthe facts and we find that for all the assessment years the tax effect is far below thethreshold limit fixed by the CBDT. Therefore, the revenue cannot pursue this appeal.Consequently, the substantial question of law no.[b] stands dismissed on the ground oflaw tax effect. On the above mentioned grounds, the substantial question of law no.[a] isanswered against the revenue and the substantial question of law [b] is left open. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)