TMI Blog1994 (11) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... ditional tax of Rs. 1,10,37,862 in terms of section 143(1A). Intimation under section 143(1)(a) was issued on 3-11-1992. Thereafter, assessee filed a petition under section 154 on 28-11-1992, which was allowed in part and the additional tax was revised to Rs. 91,45,303, as against Rs. 1,10,37,862 levied originally, and the Assessing Officer also reduced the disallowance under section 43B to Rs. 9,94,05,471 after considering the payment of Rs. 2,05,71,290 made to CMPF A/c within due date, and thus finally determined the net loss at Rs. 1,94,63,02,577. 3. In the appellate proceedings before the CIT (Appeals), it was the contention of the assessee that there was no time limit for remittance of recovery towards provident fund in the Coal Mines Provident Fund and Bonus Scheme Acts, though under the A.P. Coal Mines Provident Fund Scheme, the remittance was to be made before the end of the month following the month to which the recoveries related. It was also contended that the sum of Rs. 11,90,76,761 has been paid to the same CMPF authorities before the date for the filing of the IT Return and therefore the conditions stipulated in section 43B were satisfied. It is further contended th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absorbed depreciation and does not affect the loss returned, no levy of additional tax is warranted. 6. The learned counsel for the assessee filed a paper-book containing 97 pages and invited our attention to extract of Circular No. 549 dated 31-10-1989 on Explanatory Notes on the provisions of Direct Tax Laws (Amendment) Act, 1987, Part II, filed at page 1 of the paper book. He has also relied on the decision of the Hyderabad Bench 'B' of Tribunal in Anam Machinery Fabricators Ltd. v. ITO [1994] 49 ITD 617, a copy of which is filed at pages 3 to 18 of the paper-book. He also relied on the decisions of the Rajasthan High Court in JKS Employees' Welfare Fund v. ITO [1993] 199 ITR 765 ; of the Supreme Court in CIT v. M. Chandra Sekhar [1985] 151 ITR 433 ; of the Bombay High Court in Bank of America N.T. and S.A. v. Dy. CIT [1993] 200 ITR 739, of the Bombay High Court in Khatau Junkar Ltd. v. K. S. Pathania [1992] 196 ITR 55 and submitted that the CIT(Appeals) was not justified in confirming the addition made under section 43B and also confirming the levy of additional tax. The learned counsel for the assessee has also relied upon the Board's Circular No. 689 dated 24-8-1994, wherei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........................................... (iii) any loss carried forward, deduction, allowance or relief claimed in the return, which, on the basis of the information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed : [Emphasis supplied] Provided further that where adjustments are made under the first proviso, an intimation shall be sent to the assessee, notwithstanding that no tax or interest is found due from him after making the said adjustments : Provided also ......." The provisions of section 43B insofar as they are relevant for our purpose read as follows :-- " 43B. Notwithstanding anything contained in any other provisions of the Act, a deduction otherwise allowable under this Act in respect of (a)..... (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 employees, or (c) ... (d) .... shall be allowed (irrespective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is West Bengal, Bihar, Maharashtra, the Central Provinces and Berar, Nagaland and Orissa including those in partially excluded areas in the Provinces of West Bengal, Bihar, Central Provinces and Berar and Orissa to which the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948 has been applied under sub-section (1) of section 92 of the Government of India Act, 1935." The erstwhile princely State of Berar is no other than the part of Andhra Pradesh where the assessee, Singareni Collieries Co. Ltd., Kothagudem, is situated. Thus, the above Scheme framed by the Central Government applies to the assessee-company. Sub-para (2) of para 33 of the said Scheme, dealing with the due date for the remittances to be made reads as follows-- " 33A. Mode of payment of contribution for any period of currency commencing on or after the 1st April 1953 payment in cash.--(1) Every contribution payable under this Scheme during a period of currency commencing at any time on or after the 1st April 1953, shall be paid monthly in respect of each colliery separately on or before the date specified in sub-paragraph (2). The contributions shall be calculated as provided in this scheme for al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Provident Fund made as having made in time and so claimed the expenditure towards Company's contribution accordingly and not included the recoveries from the employees as income of the Company for the assessment year 1991-92. Further, all the Coal Mines Provident Fund dues for the financial year 1990-91 relevant to the assessment year 1991-92 are remitted before the submission of the return and evidence is enclosed." A copy of the letter dated 24-7-1991 from the Coal Mines Provident Fund Commissioner, addressed to the assessee is filed at pages 92 to 94 of the paper-book. By the said letter, it was brought to the notice of the assessee that Provident Fund contributions are required to be remitted by last day of the month following the month to which the contributions relate, and the assessee-company started defaulting in making payment of Provident Fund Contributions, since June 1990 continuously till that date, i.e., July 1991. The said letter furnished details of defaults committed by the assessee and arrived at the aggregate amounts due from the assessee as follows :-- (i) Principal amount of Provident Fund contributions from October 1990 (part) to June 1991(except Nove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustive but only an illustrative list of prima facie admissibles or inadmissibles for which adjustments can be made to the returned income or lons'. Further, Board's Circular No. 689 dated 24-8-1994, a copy of which is also filed by the assessee, also clarifies the scope of prima facie disallowance under section 143(1)(a) of the IT Act, 1961. The said circular lists out the prima facie disallowances that may be made in various types of claims and mentions against item (d), 'Any claim which is patently inadmissible in law'. In our considered opinion, neither Circular No. 549 nor Circular No. 689 issued by the Board, relied by the learned counsel for the assessee can come to the aid of the assessee, because assessee's claim in respect of remittance of provident fund contributions is patently inadmissible in law, as disallowance under section 43B is attracted in terms of clause (b) and second proviso thereunder. 13. None of the cases relied on by the learned counsel for the assessee has any application to the facts of the case on hand. In the case of Anam Machinery Fabricatores Ltd., the ITAT, Hyderabad Bench 'B' in the context of rectificatory order under section 154 passed by the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... declared in the return' mentioned in section 143(1A) refers to the net loss which is inclusive of depreciation not fully adjusted against the profit. [Garden Silk Weaving Factory v. CIT 189 ITR 512 (SC)]. The distinction between the unabsorbed loss and unabsorbed depreciation is made for a specific purpose of carrying forward and set off. For filing the return, the net loss, after allowing the depreciation fully or partly as may be, should be declared because of prima facie adjustments would attract additional tax. Thus, this ground fails." We find that the CIT (Appeals) was perfectly justified in rejecting the said contention. We are unable to subscribe to the view canvassed by the learned counsel for the assessee that additional tax can be levied only where loss returned is converted into income, and not where loss returned was only reduced, and as such, in the instant case, since the loss was only reduced on account of disallowance under section 43B, additional tax is not attracted. In view of the retrospective amendment to the provisions of section 143(1A) made by Finance Act, 1993 w.e.f. 1-4-1989, even where the loss declared by the assessee is reduced, additional income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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