2007 (11) TMI 39 - HC - Income Tax

Delayed PF and ESI payments made within days after grace period but before filing return qualify under s.43B

HC dismissed Revenue's appeal, holding that delayed payments to Provident Fund and ESI made within a few days after the statutory grace period but before ... Delayed payment of Provident Fund and Employees State Insurance - amount paid within 2 to 4 days after the grace period provided u/s 43B but before filing the return - HELD THAT:- The decision of Commissioner of Income Tax v. George Williamson (Assam) Ltd.[2006 (6) TMI 71 - GAUHATI HIGH COURT], was taken in appeal before the Supreme Court and by an order dated 7th March, 2007, the Supreme Court observed that it was concerned with the law as it stood prior to the amendment of Section 43-B of the Act. The Assessee was entitled to claim the benefit provided under Section 43-B of the Act for that period particularly in view of the fact that he had contributed to provident fund before filing the return. Accordingly, the SLP filed by the Revenue against the decision of Gauhati High Court was dismissed. The decision of the Supreme Court is fully applicable to the facts of the present case in view of what we have already mentioned above - Appeal is dismissed. Issues:1. Disputed addition of Provident Fund and Employees State Insurance amounts by the Assessing Officer.2. Interpretation of Section 43B of the Income Tax Act, 1961.3. Applicability of a decision by the Gauhati High Court and the subsequent Supreme Court order.4. Reversal of decision by the Commissioner of Income-tax (Appeals).5. Consideration of substantial question of law.Analysis:1. The case involved a dispute over the addition of amounts for delayed payment of Provident Fund and Employees State Insurance by the Assessing Officer. The Assessee argued that the payments were made within the grace period under Section 43B of the Income Tax Act, 1961, before filing the return, and contended it was a technical default.2. The Assessing Officer and the Commissioner of Income Tax (Appeals) upheld the addition, but the Tribunal reversed their decision. The Assessee cited a decision of the Gauhati High Court, supported by a Supreme Court order, which clarified the entitlement to claim benefits under Section 43B for the relevant period, especially if the provident fund contribution was made before filing the return.3. The Tribunal found the Supreme Court decision applicable to the present case, leading to the dismissal of the appeal. The Tribunal concluded that no substantial question of law arose for consideration in this matter.4. The Tribunal's judgment highlighted the importance of the Gauhati High Court decision and the subsequent Supreme Court order in interpreting the provisions of Section 43B of the Income Tax Act, 1961. The reversal of the Commissioner of Income-tax (Appeals) decision was based on the clarification provided by the higher courts.5. The Tribunal dismissed the appeal, indicating that similar cases raising the same issue would be listed for directions, ensuring consistency in the application of the legal principles established in the present judgment. The decision provided clarity on the interpretation of the law regarding delayed payments of Provident Fund and Employees State Insurance under Section 43B.