TMI Blog2004 (7) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... ,13,049 + Rs. 1,075) as contribution to ESI, all pertaining to March, 1996, but all paid before due date for furnishing the return of income for the year, is unsustainable in law particularly in view of amendments introduced by Finance Act, 2003, in s. 43B of IT Act, 1961, which are to be treated as having retrospective effect covering the year under consideration in view of principles laid down by Hon'ble Supreme Court in Allied Motors (P) Ltd. vs. CIT (1997) 139 CTR (SC) 364 : (1997) 224 ITR 677 (SC)." 4. We have heard both the parties and have gone through the orders of the authorities below. On perusal of the AO's order, it is seen that the AO has initiated reassessment proceedings under s. 147 on the ground that the aforesaid payments pertaining to the month of March, 1996, were not paid by the assessee within the due date or within the grace period as specified under the provisions of respective PF Act and ESI Act. On perusal of the tax audit report submitted by the assessee along with the return of income, it was noted by the AO that the payments pertaining to the month of March, 1996, were paid on 31st May, 1996, 4th June, 1996 and 28th May, 1996, and as such, they were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing the return of income under sub-s. (1) of s. 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return. At this stage, we may observe that the first proviso to s. 43B covering the payments referred to cl. (a) or cl. (c) or cl. (d) or cl. (e) or cl. (f) was inserted by the Finance Act, 1987, w.e.f. 1st April, 1988, but the same was held retrospective in operation by the Hon'ble apex Court in the case of Allied Motors (P) Ltd. vs. CIT (1997) 139 CTR (SC) 364 : (1997) 224 ITR 677 (SC) by holding that the said first proviso should be read as forming a part of s. 43B from its inception, i.e., from 1st April, 1984 when s. 43B was inserted in the statute. Now, the first proviso has also been made applicable to the sums referred to cl. (b) of s. 43B, i.e., the dues relating to the labours viz., contribution to provident fund, superannuation fund, gratuity fund or any other fund as referred to under cl. (b) of s. 43B of the Act. In this sense, therefore, the amended first proviso as amended by the Finance Act, 2003, covering all payments referred to in va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... providing adequate opportunity to the assessee of being heard." 4.3 Similarly, the Tribunal 'G' Bench, Mumbai, in the case of Jt. CIT vs. Devidayal (Sales) (P) Ltd. in ITA No. 778/Mum/1999, for the asst. yr. 1996-97 vide order, dt. 29th Oct., 2003, has also taken a similar view by holding as under: "After considering the arguments of both the sides and the facts of the case, we find force in the argument of the learned counsel. The Hon'ble apex Court in the case of Allied Motors (P) Ltd. have held proviso to s. 43B to be clarificatory and held that it should be treated as retrospective in operation. In s. 43B, there were two separate proviso, one for the payment relating to tax, duty, cess, fee, interest on loan, etc. and other concerning the payment with regard to provident fund, superannuation fund or gratuity fund, etc. The Finance Act, 2003, omitted second provisos and the first proviso is made applicable with regard to all the payments including the payment for PF, superannuation fund, gratuity, etc. The proviso when inserted was held to be clarificatory by the Hon'ble apex Court and, therefore, when the second proviso is omitted and the first proviso is amended, the ame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons contained in second proviso to s. 43B of the Act, are no more in existence inasmuch as the second proviso to s. 43B has been omitted by the Finance Act, 2003, which should be given retrospective effect as discussed above. We, therefore, do not find any justification or basis in disallowing the assessee's claim on account of payment towards provident fund contribution and ESI contribution pertaining to the month of March, 1996. The order of the authorities below are, therefore, set aside with a direction to the AO to allow the assessee's claim on this count. The issue is, therefore, decided in favour of the assessee. 5.1 The assessee has also raised ground challenging the reopening of assessment made by the AO under s. 147 of the Act by contending that the AO had initiated reassessment proceedings upon change of opinion and review of his original assessment order completed under s. 143(3), on the same set of facts and materials. 6. We have heard both the parties and have gone through the orders of the authorities below. It is not in dispute that the original assessment was completed under s. 143(3) of the Act. No disallowance on account of provident fund and ESI contributi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
