2013 (12) TMI 1591 - HC - Income Tax

Disallowance made u/s.43B(b) - unpaid PF/ESI amount which remained unpaid even during the grace period available - Held that - It was the case with respect to employer s contribution as per section 43B(b) of the Act and it is not in dispute that employer s contribution with respect to PF/ESI amount was as such deposited before the due date of filing of the return under section 139 of the Act. Considering the fact that second proviso to section 43B came to be deleted and as per the decision of the Hon ble Supreme Court in the case of Aloma Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT the deletion of second proviso to section 43B of the Act and amendment in the first proviso to section 43B is held to be retrospective in operation, it cannot be said that the learned Tribunal has committed any error and/or illegality in deleting the disallowance made under section 43B(b) - Decided against the revenue. Ee-compute the interest under section 234B of the Act after allowing credit of MAT.

Summary

Issues involved:
1. Disallowance under section 43B(b) for unpaid PF/ESI amount.
2. Recomputation of interest under section 234B after allowing credit of MAT.

Issue 1: Disallowance under section 43B(b) for unpaid PF/ESI amount:
The appellant contested the disallowance made under section 43B(b) for unpaid PF/ESI amount, arguing that the contributions were deposited before the due date of filing the return. The High Court referred to the decision in CIT v. Alom Extrusions Ltd. where it was held that the deletion of the second proviso to section 43B is retrospective. As the employer's contribution to PF/ESI was deposited before the due date, the disallowance was unjustified. The Court upheld the Tribunal's decision to delete the disallowance under section 43B(b) for the unpaid PF/ESI amount.

Issue 2: Recomputation of interest under section 234B after allowing credit of MAT:
Regarding the direction to recompute interest under section 234B after allowing credit of MAT, the Court relied on the decision of the Hon'ble Rajasthan High Court in CIT v. M.A. Presstressed Works. It was established that the Assessing Officer should recalculate the interest under section 234B after considering the credit of MAT. The Court found no error in the Tribunal's decision to direct the AO to recompute the interest. Consequently, the Court ruled against the revenue on this issue as well.

In conclusion, the High Court dismissed the tax appeal as it failed to establish any error in the Tribunal's decisions on both issues. The Court upheld the deletion of the disallowance under section 43B(b) for unpaid PF/ESI amount and the direction to recompute interest under section 234B after allowing credit of MAT.