2010 (2) TMI 959 - HC - Income Tax

Summary

Issues involved:
The Revenue challenging order of the Income Tax Appellate Tribunal regarding deduction of PF and ESI in employees' contribution for assessment year 2000-01.

Deduction of PF and ESI:
The Revenue approached the High Court challenging the Tribunal's decision on allowing deduction of PF and ESI in employees' contribution disallowed by the Assessing Officer. The main question was whether these payments, made beyond due dates, were allowable u/s 36(va) or to be treated as income u/s 2(24)(x) of the Income Tax Act, 1961. The High Court referred to a Supreme Court judgment in Alom Extrusions Ltd and concluded that the Finance Act 2003 operated retrospectively w.e.f. 1.4.1988, making the Act curative in nature. As the Tribunal's decision was consistent with the Supreme Court's view, the appeal was dismissed.

Retrospective Operation of Finance Act 2003:
The High Court relied on the Supreme Court judgments in Allied Motors (P) Ltd v. CIT and CIT v J.H. Gotla to establish that the Finance Act 2003 operated retrospectively from 1.4.1988 despite Parliament's explicit statement that it was to operate from 1.4.2004. The Supreme Court held that the Act was curative in nature and retrospective, leading to the dismissal of the Revenue's appeal based on the Tribunal's decision.

This summary provides a detailed overview of the legal judgment, highlighting the issues involved and the High Court's decision based on the interpretation of relevant legal provisions and Supreme Court judgments.