Sri.harisankar v. Menon

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR FRIDAY, THE 19TH DAY OF DECEMBER 2014/28TH AGRAHAYANA, 1936 WP(C).NO. 30965 OF 2009 (M) ---------------------------- PETITIONER(S): --------------- M/S.VISWADEVI CASHEW EXPORTS ANNOOR, KOTTARAKKARA, KOLLAM DISTRICT RERPESENTED BY V.SHAJI, PARTNER. BY ADVS.SRI.HARISANKAR V MENON SRI.HARISANKAR V. MENON SMT.MEERA V.MENON SRI.MAHESH V.MENON RESPONDENT(S): -------------- 1. INCOME TAX OFFICER WARD IV, KOLLAM RANGE, KOLLAM. 2. COMMISSIONER OF INCOME TAX, THIRUVANANTHAPURAM. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON19-12-2014, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).NO. 30965 OF 2009 (M) APPENDIX PETITIONER'S EXHIBITS: EXT.P1: COPY OF ORDER ISSUED BY THE 1ST RESPONDENT DATED 28.09.2009EXT.P2: COPY OF REVISION PETITION FILED BY THE PETITIONER BEFORE THE2ND RESPONDENT DATED 15.02.2008 EXT.P3: COPY OF ORDER ISSUED BY THE 2ND RESPONDENT DATED 17.03.2009 RESPONDENTS' EXHIBITS:NIL //TRUE COPY// P A TO JUDGE A.K.JAYASANKARAN NAMBIAR, J. .............................................................W.P.(C).No.30965 of 2009.............................................................Dated this the 19[th] day of December, 2014 J U D G M E N T The petitioner, who was engaged in the processing of rawcashew nuts, was assessed to tax for the assessment year 2000-2001 under the Income Tax Act. The assessment proceedings weresubsequently reopened by the 1[st] respondent in terms of Section147 of the Income Tax Act. By Ext.P1 order, that was passed by the1[st] respondent, thereafter, the payments made by the petitionerunder the Employees State Insurance Act and towards the LabourWelfare Fund, totalling an amount of Rs.34,180/-, were disallowedfor the reason that these payments were effected after the due datestipulated for the said payment under the respective enactments.Aggrieved by Ext.P1 order, the petitioner preferred a revisionpetition before the 2[nd] respondent under Section 264 of the IncomeTax Act. The 2[nd] respondent by Ext.P3 order confirmed thedisallowances. In the writ petition, the petitioner challengesExts.P1 and P3 orders of the respondents, to the extent theydisallow the amount of Rs.34,180/-, which represents thecontributions made under the Employees State Insurance Act and towards Labour Welfare Fund. 2. A statement has been filed on behalf of therespondents wherein it is admitted that, in respect of the paymentsrepresenting employers contribution under the Employees StateInsurance Scheme, the deduction claimed by the petitioner has tobe allowed. It is pointed out, however, that in respect of theemployees contribution under the Employees State Insurance Act,the claim of the petitioner for deduction cannot be accepted sincethe payments were made beyond the due date stipulated under theEmployees State Insurance Act, for making the payments. 3. I have heard Sri.Harisankar Menon, the learned counselfor the petitioner and Sri.Jose Joseph, the learned Standing counselfor the Income Tax Department. 4. On a consideration of the facts and circumstances of thecase as also the submissions made at the Bar, I find that Ext.P1 andP3 orders need to be modified to allow the deduction claimed bythe petitioner in respect of the employers contribution under theEmployees State Insurance Act. In the orders impugned in the writpetition, while considering the assessment of the petitioner, the respondents had erroneously disallowed these payments for thepurposes of deduction under the Income Tax Act. The eligibility ofthe petitioner for deduction of the employers contribution is nowsettled through the retrospective amendment made to Section 43Bby the Finance Act, 2003, as clarified by the Supreme Court in the case ofCommissioner of Income Tax v. Solar Export [(2012) 4. On a consideration of the facts and circumstances of thecase as also the submissions made at the Bar, I find that Ext.P1 andP3 orders need to be modified to allow the deduction claimed bythe petitioner in respect of the employers contribution under theEmployees State Insurance Act. In the orders impugned in the writpetition, while considering the assessment of the petitioner, the respondents had erroneously disallowed these payments for thepurposes of deduction under the Income Tax Act. The eligibility ofthe petitioner for deduction of the employers contribution is nowsettled through the retrospective amendment made to Section 43Bby the Finance Act, 2003, as clarified by the Supreme Court in the case ofCommissioner of Income Tax v. Solar Export [(2012) 210 Taxman 520].Thus taking into account the aforesaid aspectExts.P1 and P3 are set aside, to the extent they disallow an amountof Rs.24,447/-, from out of the total figure of Rs.34,180/-, whileconsidering the deductions permissible to the petitioner in theassessment for the assessment year 2000-01. The 1[st] respondentshall pass consequential orders of assessments, taking into accountthe findings in this judgment, within a period of two months fromthe date of receipt of a copy of this judgment. The writ petition is allowed to the above extent. A.K.JAYASANKARAN NAMBIAR JUDGE