The Commissioner Of Income Tax, Kolhapur v. The Nira Valley Co-Op. Distillary Ltd., Satara

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX REFERENCE NO. 151 OF 1993 The Commissioner of Income Tax, Kolhapur ...Applicant Versus The Nira Valley Co-op. Distillary Ltd., Satara ...Respondent Mr. P.C. Chhotaray i/b Smt. S. Bhattacharya, for the Applicant.Mr. S.N. Inamdar, Senior Advocate with Mr. Mihir C. Naniwadekar, for the Respondent. --- CORAM: DR.D.Y. CHANDRACHUD & A.V. POTDAR, JJ. March 16, 2012. P.C.:- 1.The Income Tax Appellate Tribunal has referred the following two questions for the decision of this Court :- (1)Whether on the facts and in the circumstances of the case, the Tribunal was right in law in deleting the addition of Rs. 4,50,000/- Tribunal was right in law in deleting the addition of Rs. 4,50,000/- being the unpaid liability of purchase-tax, made by the Assessing Officer ignoring the provisions of first and second provisos to Officer ignoring the provisions of first and second provisos to Section 43-8(a) of the Income-tax Act, 1961 ? (2) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the “additional tax cannot be added” following the decision in the case of Modi Cement Ltd. v/s. Union of India and others (1992) 193 ITR 91) of Delhi High Court and referring to Allahabad's High Court's decision in the case of Indo-Gulf Fertilizers and Chemicals Corporation Ltd. v/s Union of India and others (1992) 195 ITR 485, when the CBDT had issued clear instructions under No. 1832 on 31.12.1989 which are binding on all the Assessing authorities ?was right in law in holding that the “additional tax cannot be added” following the decision in the case of Modi Cement Ltd. v/s. Union of India and others (1992) 193 ITR 91) of Delhi High Court and referring to Allahabad's High Court's decision in the case of Indo-Gulf Fertilizers and Chemicals Corporation Ltd. v/s Union of India and others (1992) 195 ITR 485, when the CBDT had issued clear instructions under No. 1832 on 31.12.1989 which are binding on all the Assessing authorities ? 2.The relevant Assessment Year is 1989-1990. On the first question, the Tribunal has observed as follows :- “The second item is in respect of addition of purchase tax under Section 43B of the Income-Tax Act, 1961. The Assessing Officer has invoked the provisions of Section 43B and found that the purchase tax liability was not paid within the prescribed time. He accordingly disallowed the purchase tax liability under Section 43B of the Act. On appeal, the CIT(A) confirmed the addition. After due consideration, I am of the opinion that the department has no case in this respect. The assessee therefore, succeeds on this point.” 3. Ex-facie it is evident that the Tribunal furnished no reasons whatsoever for deleting the addition made under Section 43(B). Consequently, question no. 1, shall stand answered in the negative but with a direction that the issue will stand restored to the file of the Tribunal for a fresh decision on merits. As regards, question no. 2, Counsel appearing on behalf of the assessee states that the question would stand covered against the assessee by reason of the retrospective amendment made to the provisions of Section 143 by the insertion of subsection (1A) by the Direct Tax Laws (Amendment) Act, 1989 with effect from 1 April, 1989. The second question of law is therefore answered in the negative, in favour of the Revenue and against the Assessee. 4.The Reference is accordingly disposed of. There shall be no order as to costs. (DR.D.Y. CHANDRACHUD, J.) (A.V. POTDAR, J.)