2008 (12) TMI 772 - HC - Income Tax

Summary

Issues involved:
The judgment involves the question of whether the Tribunal misdirected itself in disallowing the deduction claimed by the assessee in respect of staff provident fund dues due to late payment.

Issue 1: Tribunal's disallowance of deduction for staff provident fund dues

The assessee appealed against the Tribunal's judgment regarding the deduction of staff provident fund dues for the assessment year 1998-99. The Assessing Officer disallowed the deduction as the dues were paid after the prescribed due date but before the date of filing the income tax return. The CIT(A) reversed the Assessing Officer's decision, allowing the deduction. However, the Tribunal overturned the CIT(A)'s decision based on the Madras High Court judgment in CIT v. Synergy Financial Exchange Ltd., stating that the amendment to section 43B of the Income-tax Act did not apply retrospectively. The High Court, citing its own judgment in CIT v. P.M. Electronics Ltd., upheld the CIT(A)'s decision, emphasizing the binding nature of the Supreme Court's decision in CIT v. Vinay Cement Ltd. The High Court ruled in favor of the assessee, setting aside the Tribunal's judgment and affirming the CIT(A)'s decision on the issue.