1993 (8) TMI 92 - AT - Income Tax

Interpretation of Income Tax Act's Section 43B clarified by Tribunal

SHRI SWAMI ATMANAND SARASWATI AYURVEDIC SAHAKARI PHARMACY LTD. Versus ASSISTANT COMMISSIONER OF INCOME TAX.

The judgment clarified the interpretation of Section 43B of the Income Tax Act, 1961, emphasizing the procedural nature of furnishing evidence of payment ... - Issues:1. Interpretation of Section 43B of the Income Tax Act, 1961 regarding unpaid sales-tax liabilities.2. Requirement of furnishing evidence of payment along with the return under the proviso of Section 43B.3. Whether failure to furnish evidence of payment along with the return deprives the assessee of the benefit of the section.4. Comparison with similar provisions in other sections of the Income Tax Act.Detailed Analysis:1. The judgment dealt with the interpretation of Section 43B of the Income Tax Act, 1961 concerning unpaid sales-tax liabilities. The original appeals before the Tribunal challenged orders under Section 263, where the CIT directed the Assessing Officer to add certain amounts to the total income of the assessee. The Tribunal directed the Assessing Officer to allow the claim of the assessee based on previous decisions, holding the proviso introduced by the Finance Act, 1987, as retrospective in operation.2. The issue revolved around the requirement of furnishing evidence of payment along with the return under the proviso of Section 43B. The Department contended that the Tribunal had not considered the necessity of providing such evidence. The Tribunal, however, emphasized that the requirement is procedural and not mandatory, citing similar provisions in other sections of the Act.3. The judgment addressed whether the failure to furnish evidence of payment along with the return would deprive the assessee of the benefit of the section. The Tribunal held that substantial compliance by the assessee is sufficient, and the Assessing Officer can verify the truthfulness of any claim during the assessment stage. Non-compliance with the procedural requirement does not result in loss to the Revenue if the payment was made within the prescribed time.4. The judgment compared the proviso of Section 43B with similar provisions in other sections of the Income Tax Act, such as Sections 12A, 80J, 184(7), and 271B. It highlighted previous court decisions interpreting the requirement of furnishing documents along with the return, emphasizing that procedural aspects are directory and not mandatory. The Tribunal dismissed the Department's application, stating that the filing of documents at the assessment stage is sufficient compliance with the procedural requirements.In conclusion, the judgment clarified the interpretation of Section 43B, emphasizing the procedural nature of the requirement to furnish evidence of payment along with the return. It upheld the principle of substantial compliance and highlighted the Assessing Officer's authority to verify claims during the assessment stage, ultimately dismissing the Department's application.