TMI Blog2014 (10) TMI 402X X X X Extracts X X X X X X X X Extracts X X X X ..... mployees' and employer's contributions are covered under the amendment to Section 43B of I.T. Act - the Tribunal was right in holding that payments are subject to benefits of Section 43B – Decided against revenue. - Income Tax Appeal No. 1002 of 2012, Income Tax Appeal No. 1034 of 2012 - - - Dated:- 14-10-2014 - S. C. Dharmadhikari And A. K. Menon,JJ. For the Appellant : Mr.Vimal Gupta, Senior Advocate. For the Respondent : Mr. Mihir Naniwadekar JUDGMENT (Per A. K. Menon, J.) 1. This order disposes of the above two appeals under Section 260A of the Income Tax Act, 1961 ('the I.T. Act) which involve common questions of law, which read as under:- (1) Whether the decision of the ITAT ignoring the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o orders passed by the Income Tax Appellate Tribunal, Pune 'A' Bench on 29th July, 2011 in Income Tax Appeal No.340/PN/10 in respect of assessment year 2003- 04 and Income Tax Appeal No.341/PN/10 in respect of assessment year 2004-05. 4. The facts being similar, we will refer to the facts pertaining to Income Tax Appeal No.1002 of 2012 in respect of A.Y.2003-04. The assessee had filed a return of income declaring a total loss of ₹ 1,88,71,600/- on 27th November, 2003. A Notice came to be issued under section 148 of the Income Tax Act, 1961 ('the I.T. Act') on 30th August, 2004 and while completing the assessment under section 143(3) r/w. Section 147 of the I.T. Act, additions were made on account of payment of emplo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and (b) whether the Tribunal was right in holding that payment of employees contribution is subject to the provisions of section 43B of the I.T. Act entailing that amendment to section 43B would lead to the inclusion of the employers' contribution as well. 8. Mr. Gupta submitted that the Tribunal erred in deletion of addition of amount to the extent of ₹ 32,03,947/- and that the impugned order dated 29th July, 2011 is liable to be quashed. Mr.Gupta relied upon the judgment of Punjab Haryana in Commissioner of Income-Tax V/s. Lakhani Rubber Works reported in [2010] 326 ITR 415 (P H) and submitted that question Nos.1 2 in that case had already been decided against the revenue in view of the decision of Alom Extrusions Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable with effect from April 1, 2004 and the assessee would argue that it was curative in nature, clarificatory and, therefore, applied retrospectively from 1st April, 1988. The department argued that it was clarifactory and, therefore, applied prospectively. The Supreme Court held that Finance Act, 2003 would be applicable retrospectively and defaulter who fails to pay the contribution to the welfare fund right upto April 1, 2004 and who pays the contribution after April 1, 2004, would get the benefit of deduction under section 43B of the I.T. Act. It is held that the Finance Act, 2003 to the extent indicated above would be curative in nature and hence is retrospective. The reason being to be that the employers should not sit on the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entions that this situation continued between 1st April, 1984 and 1st April, 1988. It is also noticed that section 43B was again amended and the first proviso thereto has been added which was restricted to tax, duty, cess or fee excluding labour welfare. In view thereof, the second proviso as follows came to be inserted:- Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid during the previous year on or before the due date as defined in the Explanation below clause (va) of subsection (1) of section 36. The second proviso was further amended with effect from 1st April, 1989 to read as under:- Provided further that no deduction shall, in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of tax, duty, cess and fee on the one hand with contributions to various Employees' Welfare Funds on the other. All this came up for consideration before the Hon'ble Supreme Court in the case of Alom Extrusions Ltd. (supra). The Tribunal in the case at hand relied upon the said judgment. There is no reason to fault the order passed by the Tribunal. We are of the view that the decision of the Supreme Court in Alom Extrusions Ltd. applies to employees' contribution as well as employers' contribution. Question Nos.2, 3 4 are accordingly answered in favour of the assessee and against the revenue. 16. The facts in Income Tax Appeal No.1034 of 2012 are similar, except for the change in the assessment year and the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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