TaxTMI 
TaxTMI 
2009 (3) TMI 87
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....revised intimation both bearing the date February 6, 1995 served on the appellant on December 11, 1996 were barred by limitation and the Tribunal was justified in law in not deciding the said contention and its purported findings in that behalf are arbitrary, unreasonable and perverse ? (iv) Whether and in any event the Tribunal was justified in law in upholding the disallowance of provident fund contribution actually paid by the appellant on the ground that payment was not made within the statutory period? For the assessment year 1994-95 the appeal was also admitted on the following substantial questions of law :- (i) Whether the Tribunal was justified in law in holding that disallowance under Section 43B in respect of provident fund could be made as a prima facie adjustment under Section 143 (1) (a)? (ii) Whether and in any event the Tribunal was justified in law in upholding the disallowance of provident fund contribution of Rs.10,78,236/- relating to earlier year which was disallowed in that year and claimed by the appellant on the basis of actual payment in the assessment year 1994-95 ? (iii) Whether and in any event the Tribunal was justified in law in upholdin....
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....by the assessee on December 11, 1996. According to the appellant the said revised rectification order were time barred. After hearing the parties the said appellant had rightly invoked Section 154 and disallowed the Provident Fund. The assessee preferred an appeal before the Learned Tribunal since the question of limitation was not decided by the Commissioner of Income Tax on the question that the said revised intimation and the order both were passed without service of notice under Section 154 and were time barred. Such points were also canvassed before the Learned Tribunal and on merits it was submitted that the contribution paid towards Provident Fund by the assessee in terms of the order passed by the Hon'ble Court and as such was required to be treated as having been paid within the due date and could not be disallowed under Section 43B. It was submitted by the Learned Tribunal that the Hon'ble Court by its order dated January 29, 2003 did not extend the time of the due date for payment of such Provident Fund dues and Assessing Officer had rightly invoked under Section 154 to disallow the said amount. It is also held that the opportunity was duly granted to the assessee bef....
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....ard to the provision of Section 43B. Section 43B was inserted in the Act by the Finance Act, 1983 with effect from April 1, 1984, providing for deduction of certain amounts only upon actual payment irrespective of the method of accounting employed by the assessee. The object of introduction of the said Section 43B was to disallow the claims for deduction of statutory liabilities which were being disputed by the assessee and not paid by them but nevertheless claimed as a deduction on the basis of mercantile system of accounting. He also drew attention to the two provisions which were inserted under Section 43B with effect from April 1, 1988. He also drew our attention to the Finance Act of 2003 by which the said Section 43B was amended with effect from April 1, 2004. In the instant case it would be evident from the Tax audit report as well as the profit and loss account which was disclosed by the assessee that no additional information was contained in the computation of income for the assessment year 1989-90. With the computation of income for the assessment year 1994-95, the assessee enclosed challans in respect of the payments of Rs.3,43,053/- and Rs.10,78,236/- which gave the....
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....counts accompanying it, the deduction claimed must be inadmissible. Only then can it be disallowed under the proviso to Section 143(1)(a). If any further enquiry is necessary, or if the Income-Tax Officer feels that further proof is required in connection with the claim for deduction, he will heave to issue a notice under sub-Section (2) of Section 143". See also SRF. Charitable Trust V. Union of India (1992) 193 ITR 95 (Delhi). In Circular No. 581 (see [1990] 186 ITR (St.) 2] dated September 28, 1990, issued by ;the Central Board of Direct Taxed, it has been said that the scope of the powers to make prima facie adjustments under Section 143(1)(a) is "somewhat conterminous with the power to rectify a mistake apparent from the record under Section 154". The nature of the remedy, therefore, circumscribes the power under Section 143(1)(a). In fact the nature of power under Section 143(1)(a) has been conceded by the respondent to be limited to those adjustments in respect of which Section 154 would provide an adequate remedy. However, the similarity between the power under Section 143(1)9a) and Section 154 is to the extent stated, viz., the determination of liability as ascertain....
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....tly bad. The law relied on by Learned Counsel for the appellant in this connection also supports such view. Further in respect of payment of such contributions, the due date has to be ascertained and a finding has to be arrived at as to whether such due date is the one referred to under Section 139 of the Act or its due date under the relevant Act which provides for the payment of contributions and provident fund and Employees' State Insurance contributions. As apparently no opinion could be formed from the records available on the face of it for deciding such due date, the power under Section 154 could not have been exercised for rectification of the order earlier passed". In the instant case also, the "due date" for payment of the Provident Fund contribution within the meaning of the Explanation below Section 36(1)(va) was not available in the return or the accounts or documents accompanying it and could not be ascertained without calling the assessee and making further enquiry. The Assessing Officer could not have made any prima facie adjustment under Section 1431(a) or passed any order under Section 154 amending the intimation under Section 143(1)(a) on the basis of the r....
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.... by the Assessing Officer also : From 14-5-1992 :Finance Act, 1992 : A proviso to sub-section (2) was inserted with effect from the date on which the Finance Act, 1992, received the assent of the President, i.e., 14-5-92. As per the existing provisions, an assessee can file an application for rectifying any mistake in the intimation referred to in clause (a) of section 143(1). However, he has no right of appeal against such intimation. The above insertion provides the Assessing Officer is required to take action on such application for rectification within a period of 3 months from the end of the month in which the application is filed. The assessee has the right to appeal to the Deputy Commissioner (Appeals), if no action has been taken by the Assessing Office within the aforesaid period. Appeal from failure to rectify intimation :- For the purpose of section 249 (2)(c) which provides that an appeal has to be presented within 30 days from the date of service of the order sought to be appealed against, the intimation under section 143(1) should be deemed to have been served on the assessee (for this limited purpose) on the date following the expiry of the period of three mont....
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....to be given. It is submitted that the CIT(A) did not decide the said question and from the fact it appears that the CIT(A) dismissing the assessee's ground as infructuous. On the ground that the Assessing Officer had jurisdiction to act under Section 154. It further appears from the fact as pointed out by the Learned Counsel appearing on behalf of the assessee that the Tribunal held contrary to the records that the assessee had not raised the question either before the CIT(A) although it is submitted that the assessee has specifically pleaded the fact relating to the question of limitation in the appeals filed before the CIT(A) and also argued the same at the hearing before both the said appellate authorities. It is further submitted that the finding of the Tribunal as regards the service of notice under Section 154 and refusing to decide the question of limitation are contrary to the record and perverse. Accordingly it is submitted that the question No. 1 relating to the jurisdiction if it is answered in favour of the assessee it would not be necessary to decide the question No. (ii) and (iii). On the contrary it was submitted on behalf of the respondent that on 6th of February....