TMI Blog1992 (12) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... he Appellant that the Dy. C.W.T. (Appeals) erred in confirming the non-deductibility of the assessee's outstanding tax liabilities arising on self-assessment of Income-tax for the earlier assessment year in computing the assessee's net wealth and such tax liabilities arising on self-assessment and outstanding on valuation date are not covered by the restrictive provisions of section 2(m) and are deductible in computing the assessee's net wealth. 3. The facts relating to the dispute in these appeals are mentioned in the assessment orders for 1984-85 and 1985-86 and also in the appeal orders. According to the assessee a sum of Rs. 2,00,685 was payable as Income-tax for the assessment year 1983-84. There was no order passed by any officer in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim a deduction for the same in the computation of net wealth. Section 140A of the Income-tax Act only states that where any tax is payable on the basis of any return required to be furnished under section 139 or 142 or as the case may be section 148 the assessee shall be liable to pay such tax, before furnishing the return. It does not say when it becomes due. Referring to section 4 of the Income-tax Act the learned Counsel for the assessee argued that the charge of tax relates to the income of the previous year and it falls due at the end of the previous year. 5. The learned Departmental Representative stated that the self-assessment tax claimed as a deduction by the assessee relates to the assessment year 1983-84 and it is not the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uation date and is claimed by the assessee in appeal, revision or other proceeding as not being payable by him ; or (b) which although not claimed by the assessee as not being payable by him, is nevertheless outstanding for a period of more than twelve months on the valuation date, shall not be deductible as a debt. The claim of the Appellant is that the income-tax liability as per section 4 of the Income-tax Act is on the valuation date and as self-assessment tax is payable by a statutory provision and not in pursuance of any order passed it should be allowed as a deduction in computing the net wealth of the assessee for the subsequent assessment years so long as such self-assessment tax was outstanding and was not paid. Section 140A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s before the filing of the return. It can be paid at any time before filing of the return. Section 140A(3) also does not prescribe a definite time limit for the enforcement of the liability. The return which can be filed under section 139 can be filed either under section 139(1) or 139(2) or 139(3) or 139(4). Therefore till the prescribed time limit under section 139 has expired the assessee was entitled to furnish the return of income and pay the self-assessment tax before the furnishing of such return. In view of the language of section 140A self-assessment tax is not payable as result of any order under the Act. 7. If we take a second look at the provisions of section 2(m)(iii) from the net wealth debts owed by the assessee on the val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any time before the filing of the return. It is not payable in pursuance of " an order " which is the word used to exclude such liability under section 2(m)(iii), if it was outstanding as a result of the order for a period of more than 12 months. We derive support for this view from the decision of the Calcutta High Court in the case of Textile Machinery Corporation Ltd. v. CWT [1968] 67 ITR 122. In that case the Calcutta High Court dealt with section 4 of Bengal Finance (Sales Tax Act) 1941 which is couched in the following language : " With effect from such date as the State Government may by notification in the Official Gazette, appoint, being not earlier than 30 days after the date of the said notification that every dealer whose gro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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