TaxTMI 
TaxTMI 
TaxTMI 
2007 (9) TMI 364
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....essment year was completed under section 143(3) on March 30, 1985, on the basis of total income of Rs. 1,21,000. The Assessing Officer noted that the assessee had made provisions for payment of sales tax to the extent of Rs. 40,796 and provident fund of Rs. 8,901 and these items were disallowable under section 43B of the Act but it was not so done at the time of original assessment and the mistake being apparent notices under section 154 of the Act deserved to be issued and he accordingly so did. When the matter stood thus, the Commissioner of Income-tax invoked the jurisdiction under section 263 of the Act and expressed the opinion that the order of assessment passed by the Assessing Officer was erroneous and prejudicial to the interests of the Revenue, The Commissioner eventually did not advert with regard to the payment of provident fund. He restricted the amount to the delayed payment of sales tax and remanded the matter to the Assessing Officer for passing an order of fresh assessment. After the order of the Commissioner passed under section 263 of the Act, the Assessing Officer passed a fresh order of assessment and disallowed both the items, namely, sales tax and the provide....
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....ademic in nature. The application is, therefore, dismissed." 6. We have heard Mr. Rohit Arya, learned senior counsel with Mr. Sanjay Lal for the Revenue. Despite service of notice, none has appeared on behalf of the assessee. 7. It is submitted by Mr. Arya, learned senior counsel for the Revenue, that the Tribunal has grossly erred by placing reliance on the decisions rendered by the Patna High Court as the said decision runs counter to the dictum of the apex court in Chowringhee Sales Bureau P. Ltd. v. CIT [1973] 87 ITR 542 ; AIR 1973 SC 376 and Sinclair Murray and Co. P. Ltd. v. CIT [1974] 97 ITR 615. It is urged by him that when the tax has been collected and not paid, the deduction is not allowable and the Tribunal has totally erred by extending the benefit. 8. To appreciate the submissions put forth by Mr. Arya, it is appropriate to refer to the relevant part of section 43B. Section 43B was inserted by the Finance Act, 1983, with effect from April 1, 1984. The requisite part of section 43B which is relevant for the present purpose is reproduced below : "43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this ....
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.... pay the amount collected to the State Government any refund thereof would be prejudicial to the interests of the Revenue, he cannot be entitled to claim the sum so paid or refunded. Be it noted, both the decisions were rendered before the amended provision came into existence. In the case of Sri Jagannath Steel Corporation [1991] 191 ITR 676 (Cal), a Division Bench of the Calcutta High Court took note of the amended provision engrafted under section 43B and the Budget Speech of the Finance Minister and thereafter expressed the view as under (page 680) : "But the question still remains as to whether the provision in section 43B is applicable to a case where the statutory liability has been discharged by the assessee within the period prescribed under the law even though such payment is made after the close of the relevant previous year. In other words, the question is whether tax or duty if paid by the assessee in terms of the statute imposing obligation to pay such tax or duty, even though such payment is made in the next succeeding previous year, the assessee is entitled to deduction of such liability for the assessment year relevant to the previous year in which such liab....
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....43B as amended. The benefit of deduction in such cases should not be confined only to the assessment year 1984-85, but should be extended to the subsequent assessment years also. In this case, the liability was required to be discharged or could only have been discharged by the assessee after the expiry of the accounting year within 30 days from the end of the accounting year and, accordingly, this amount for the particular quarter was not actually payable within the accounting year under the relevant law." 12. In Jamshedpur Motor Accessories Stores [1991] 189 ITR 70 (Patna), after referring to the earliest amendment, i.e., April 1, 1984, it has been held that it was a clarificatory amendment and any sum payable has to be given a meaning to the liability which has been incurred by the tax payer during the previous year irrespective of the date by which the sum is statutorily payable. After so expressing, the Bench has proceeded to hold as under (page 80) : "It is, therefore, held that the petitioner was entitled to claim deduction of such sum on account of Bihar sales tax, additional sales tax and Central sales tax, if actually paid by it on or before the due date applicable to i....