The Commissioner Of Income Tax v. M/S Nuchem Ltd

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA N0. 323 of 2009Date of decision 2 .2.2010 The Commissioner of Income Tax ... Appellant Versus M/s Nuchem Ltd. ... Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMARHON'BLE MR. JUSTICE AJAY TEWARI Present:Ms Urvashi Dhugga, Advocate for the appellant 1. To be referred to the Reporter or not ? 2. Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. The Revenue has approached this Court under Section 260 A ofthe Income Tax Act,1961 (for brevity 'the Act') challenging order dated19.9.2008 passed by the Income Tax Appellate Tribunal, Delhi Bench 'F',New Delhi (for brevity 'the Tribunal') in ITA No. 736 /Del/08 in respect ofthe assessment year 2000-01. It has been claimed that following substantivequestion of law would arise for determination of this Court: “ Whether on the facts and in the circumstances of the case, theld. ITAT was right in law in allowing the claim of deduction ofthe PF and ESI in respect of employees' contribution amountingto Rs. 49,62,671/- disallowed by the Assessing Officer andconfirmed by the Ld. CIT(A) disregarding the facts that thepayments were made beyond the due dates and therefore, notallowable u/s 36(va) and were to be treated as income u/s 2(24(x) of the Income Tax Act, 1961 “? ld. ITAT was right in law in allowing the claim of deduction ofthe PF and ESI in respect of employees' contribution amountingto Rs. 49,62,671/- disallowed by the Assessing Officer andconfirmed by the Ld. CIT(A) disregarding the facts that thepayments were made beyond the due dates and therefore, notallowable u/s 36(va) and were to be treated as income u/s 2(24(x) of the Income Tax Act, 1961 “? It could not be successfully disputed by the learned counsel for theRevenue that the aforesaid question of law has been decided by the Hon'bleSupreme Court in a batch of appeals including the case of CITv. M/s ITA No.323 of 2009 Alom Extrusions Ltd (Civil Appeal No. 7771 of 2009 decided on25.11.2009). The question posed before the Hon'ble Supreme Court was : “ Whether omission (deletion) of the second proviso to Section43 B of the Income Tax Act,1961 by the Finance Act, 2003operated with effect from 1[st] April, 2004 or whether it operatedretrospectively with effect from 1[st] April, 1988 ?“ Relying on an earlier judgement rendered in the case of Allied Motors(P) Ltdv. CIT (1997) 224 ITR 677 where scheme of Section 43 B of theAct was examined, their Lordships of Hon'ble the Supreme Court concludedthat Finance Act 2003 was to operate retrospectivly w.e.f. 1.4.1988 whenthe 1[st] proviso was inserted despite the fact that Parliament has statedexplicitly that Finance Act was to operate w.e.f. 1.4.2004. Likewise reliancehas been placed on another judgement of the Hon'ble Supreme Courtrendered in the case of CIT v J.H.Gotla (1985) 156 ITR 323. It was for theaforesaid reason that the Hon'ble Supreme Court has held that Finance Actof 2003 is curative in nature. It has also been held that the Act isretrospective and it would operate w.e.f. 1.4.1988. Once the aforesaidposition is clear then no question of law framed by the Revenue requires tobe adjudicated. The order of the Tribunal is consistent with the view takenby the Hon'ble Supreme Court. Accordingly the appeal fails and the same isdismissed. (M.M.Kumar) Judge 2.2.2010 (Ajay Tewari )JudgeJudge