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TMI Blog2013 (1) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... ee appeals. The facts are being taken from ITA No. 116 of 2008. 2. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 2.2.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench "C", New Delhi (hereinafter referred to as "the Tribunal) in ITA No. 978/D/2004, for the assessment year 1998-99, claiming the following substantial questions of law:- "I) Whether on the facts and circumstances of the present case, the Income Tax Appellate Tribunal has fallen in legal error, in upholding the addition of Rs.23,31,489/- under Section 43B being employer's contribution to P.F. and E.S.I. deposited within the year and/or before the date of filing of return? I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d return was processed under Section 143(1)(a) of the Act on 17.3.1999 and an addition of Rs. 1,72,143/- was made against which the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [in short "the CIT (A)"]. The CIT(A) vide order dated 21.2.2000 deleted the said addition made by the Assessing Officer. Pursuant to the said addition made under Section 143(1)(a) of the Act, the assessee filed a revised return on 21.4.1999 declaring a loss of Rs. 20,75,37,520/- which included carry forward losses aggregating to Rs. 19,18,24,432/-. Subsequently, the second revised return was filed on 11.1.2000 declaring a loss of Rs. 20,85,68,440/- which included carry forward loss aggregating to Rs. 19,19,60,143/-. The assessee filed a t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erein is whether the statutory payment in respect of ESI contribution and Provident Fund of the employees which were paid by the assessee before the filing of the return were allowable deductions within the meaning of Section 43B of the Act. 5. Learned counsel for the parties are ad idem that the issue raised herein stands concluded by the judgment of the Hon'ble Supreme Court in Commissioner of Income-Tax v. Alom Extrusions Ltd., [2009] 319 ITR 306 (SC). 6. Learned counsel for the revenue does not dispute that the issue is covered by the aforesaid judgment. 7. The Hon'ble Supreme Court in Alom Extrusions Ltd's case (supra) while delving into the similar issue had noticed as under:- "We find no merit in these civil appeals filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so resulted in implementation problems, which have been mentioned hereinabove, and which resulted in the enactment of Finance Act, 2003, deleting the second proviso and bringing about uniformity in the first proviso by equating tax, duty, cess and fee with contributions to welfare funds. Once this uniformity is brought about in the first proviso, then, in our view, the Finance Act, 2003, which is made applicable by the Parliament only with effect from 1st April, 2004, would become curative in nature, hence, it would apply retrospectively with effect from 1st April, 1988. Secondly, it may be noted that, in the case of Allied Motors (P) Limited vs. Commissioner of Income Tax, reported in [1997] 224 I.T.R.677, the Scheme of Section 43-B of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso which supplies an obvious omission in the section and which proviso is required to be read into the section to give the section a reasonable interpretation, it could be read retrospective in operation, particularly to give effect to the section as a whole. Accordingly, this Court, in Allied Motors (P) Limited (supra), held that the first proviso was curative in nature, hence, retrospective in operation with effect from 1st April, 1988. It is important to note once again that, by Finance Act, 2003, not only the second proviso is deleted but even the first proviso is sought to be amended by bringing about uniformity in tax, duty, cess and fee on the one hand vis-a-vis contributions to welfare funds of employee(s) on the other. This is one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, Finance Act, 2003, to the extent indicated above, should be read as retrospective. It would, therefore, operate from 1st April, 1988, when the first proviso was introduced. It is true that the Parliament has explicitly stated that Finance Act, 2003, will operate with effect from 1st April, 2004. However, the matter before us involves the principle of construction to be placed on the provisions of Finance Act, 2003." 8. The Hon'ble Supreme Court held that the amendment by Finance Act, 2003, whereby second proviso to Section 43B was deleted, to be curative in nature and was operative from 1.4.1988 (when first proviso came to be inserted). Once that was so, the appellant was entitled to deduction on account of contributions made to ESI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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