TMI Blog1993 (8) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer on 7-1-1991 and latter expressing doubts regarding sufficiency of evidence attached to the return in respect of payment of taxes, dues covered under section 43B. The assessee has claimed that the revised return filed on9-1-1991 on the basis of the discussion and it was contended that the adjustments made by the Assessing Officer under section 143(1)(a) are not covered under the said section. By virtue of the said letter dated14-1-1991 assessee requested the Assessing Officer to amend the intimation in the light of mandatory provisions of section 143(1B). Assessee also approached the Hon'ble High Court of Allahabad and the latter vide order dated 14th February, 1991, directed the assessee to file an application under section 154(1)(b) of the Income-tax Act raising the contentions and objections as are open in law with regard to the intimation sent by the Assessing Officer under section 143(1). The Deputy Commissioner was directed by the Hon'ble High Court to consider the said application of the assessee and the material enclosed thereto and pass orders within three weeks. Assessee accordingly filed a letter dated20th February, 1991 which was followed by an applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the return of income notwithstanding the voluminous nature of the evidence. Assessee accordingly filed a revised return along with the documents in support of the claim of statutory payments having been made before the time for filing of the return of income. The Assessing Officer, however, got the intimation under section 143(1) served upon the assessee by a special messenger on10th January, 1991ignoring the revised return and making adjustments on account of bonus, sales-tax etc. under section 43B apart from other adjustments. 4. The learned counsel contended that Assessing Officer was wrong to make adjustments on account of bonus and taxes paid under section 43B as assessee had made the payment before the time allowed for filing of the return of income and apart from giving details of such payments assessee had indicated the nature of proof available and its willingness to produce the evidence as and when demanded. The reasons for not furnishing the evidence were also given in the letter attached to the return of income. In these circumstances, according to the learned counsel, Assessing Officer was not justified in making the disallowance. The Assessing Officer should h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me then the assessee was justified in rectifying the omission by filing a revised return on being advised about such omission. The observation of the Assessing Officer that the revised return was a camouflage was unwarranted as under section 139(5) assessee is entitled to rectify any omission made at the time of filing of the original return. Moreover, according to the learned counsel, assessee had revised the claim relating to depreciation as also claim under section 43B. The observation of the Assessing Officer that the revised return was a camouflage, according to the learned counsel, is misconceived. It was accordingly pleaded that the appeal of the assessee may be accepted and the Assessing Officer directed to amend the intimation and allow deduction under section 43B. 6. The learned D.R., on the other hand, contended that under proviso to section 43B deduction on account of statutory payments are permissible if the payment is made before the time allowed for filing of the return and the proof of payment is attached to the return of income. In this case, assessee may have paid the taxes, etc. within the time allowed for filing of the return of income but the proof thereof ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 143(1) in respect of statutory payments under section 43B and whether the Assessing Officer on the facts and in the circumstances of the case, was justified in refusing to amend the intimation issued in respect of the return filed by the assessee on 8-1-1991. The dispute has its origin on the interpretation of proviso to section 43B inserted by the Finance Act of 1987 w.e.f.1-4-1988. Under section 43B, deduction otherwise allowable under the Income-tax Act in respect of: (a) any sum payable by the assessee by way of tax, duty, cess or fee by whatever name called under any law for the time being in force; or (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of the employee; or (c) any sum referred to in clause (ii) of sub-section (1) of section 36; or (d) any sum payable by the assessee as interest on any loan or borrowing from any public financial institution or State financial corporation or State Industrial investment corporation in accordance with terms and conditions of the agreement governing such loan or borrowing is allowed as a deduction in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd made adjustment of Rs. 1,22,92,864 under section 43B on the ground that no evidence of such payments has been furnished along with the return of income as required by the first proviso to section 43B. On receipt of the information on 10th January, 1991 assessee filed objections on14-1-1991. Drawing attention of the Assessing Officer about the note in assessee's covering letter of the return of income dated20th December, 1990and filing of the revised return in consequence of informal discussion of assessee's representative with the Assessing Officer on7-1-1991. Assessing Officer had sent second intimation to the assessee on the basis of the revised return and the claim under section 43B was disallowed on the ground that the evidence for payment under section 43B should have been filed along with the return under section 139(1) and since the evidence had been filed along with the return under section 139(5) hence the claim is inadmissible. Assessee then approached the Hon'ble High Court and the latter directed the assessee to file an application under section 154(1)(b) raising such contentions and objections as may be available under law and directed the Deputy Commissioner to dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Khatau Junkar Ltd., their Lordships of the Bombay High Court have also held that adjustment under section 143(1) can be made only if on the basis of material available in the return accompanying documents the claim of deduction is prima facie inadmissible. Their Lordships have also held that disallowance under section 143(1)(a) cannot be made for lack of evidence. 12. At this stage it becomes relevant to deal with the contention raised on behalf of the revenue that the decisions of the Delhi High Court and Bombay High Court are inapplicable in respect of deduction under proviso to section 43B as the furnishing of evidence along with the return of income is the requirement of law. The contention raised requires serious consideration. As already pointed out, section 43B is inapplicable by virtue of first proviso if the sum referred to under section 43B is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 and the evidence of such payment is furnished by the assessee along with such return. So far as applicability of the proviso to section 43B is concerned, two conditions must ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been paid during the previous year or before the due date. The due date for the purposes of this proviso shall be the due date as under Explanation to clause (v) of sub section (1) of section 36. This amendment will take effect from1st April, 1990and will accordingly apply in relation to assessment year 1988-89 and subsequent years." 15. As is clear from the above, the stress is on the actual payment before the specified date and there is no reference regarding the attachment of proof of payment. The purpose behind requirement of proof along with the return, in our view, is to facilitate assessment and to discourage inaccurate claims by the assessee. Though the requirement of law is to file evidence along with the return of income, Assessing Officer gets an occasion to consider the same only at the time of making the assessment or adjustment permissible under section 143(1)(a). There seems to be a purpose behind requirement of law for furnishing of evidence along with the return of income. In the present set up the thrust is upon dispensing with the requirements of the assessees to attend income-tax proceedings. The purpose, therefore, in our view, is to facilitate assessment wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave proceeded to pass intimation order under section 143(1)(a) without giving reasonable time to the assessee to furnish such proof as was considered necessary by him. This is one aspect of the matter. 17. The second aspect of the matter is that assessee had given the details of the payments and indicated the proof available in respect of the payments covered under section 43B. On the basis of this information, a question arises as to whether adjustment could be made by disallowing the claim under section 43B. As held by their Lordships of the Delhi High Court in the case of SRF Charitable Trust and their Lordships of the Bombay High Court in the case of Khatau Junkar Ltd. disallowance under section 143(1)(a) can be made only if the claim is prima facie inadmissible considering the fact that the statutory requirement of furnishing of evidence of payment along with the return belongs to area of procedure, Assessing Officer as held earlier was duty bound to issue a notice to the assessee requiring the proof considered necessary by the former to support the claim. Such requisition not having been issued, the only course open to the Assessing Officer was to accept the claim on the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion at the time of filing of the original return. Under section 139(5), if assessee discovers any omission or any wrong statement after filing of original return, he may furnish a revised return at any time before the expiry of time specified under that sub-section. If Assessing Officer is of the view that Assessing Officer has made an omission, there is no reason why assessee could not file a revised return to correct that omission. There may be two possible views in respect of furnishing of proof under proviso to section 43B along with the return. However, in this case, on the one hand, the revenue has treated the non-filing of the sufficient evidence along with the return in support of the claim under section 43B as a ground for denying the claim and on the other hand, it has been held that the revised return was a camouflage. The revenue wants to blow hot and cold in same breath. It wants to eat the cake and have it too. If there is omission in furnishing of proof of original return, assessee would be entitled to file a revised return under section 139(5). The view of the revenue on the one hand that there was omission by the assessee to furnish the proof along with the origi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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