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2011 (4) TMI 1185 - HC - Income TaxDisallowance - Sales tax paid - Payment was made within the time prescribed by the Himachal Pradesh Sales Tax Act - AS per the provisions of the Sales Tax Act the appellant could pay the sales tax collected to the concerned authorities within one month of the close of each quarter - Consequently, sales tax collected for the quarter January - March 1984, was payable by 30-4-1984 - The sales tax amount was paid by the assessee on 27-4-1984 - The argument of the assessee was that the expression sum payable (by way of tax) would be attracted to only that situation where both the liability accrued and became due for payment in the accounting year of the assessee- In other words where the liability became due for payment on a date beyond the accounting year of the assessee, the provisions of section 43B of the IT Act would not apply - Decided in favour of assessee.
Issues:
1. Interpretation of section 43B of the Income-tax Act, 1961 regarding disallowance of sales tax paid after the due date. 2. Applicability of the proviso added by the Finance Act, 1987 to section 43B. 3. Effect of judgments in the cases of Escorts Ltd. and Jamshedpur Motor Accessories Stores on the interpretation of section 43B. 4. Impact of the Supreme Court decision in Allied Motors (P.) Ltd. v. CIT on retrospective effect of the proviso to section 43B. 5. Consideration of the timeline of filing the return and payment of sales tax liability in relation to the judgment in Allied Motors (P.) Ltd. case. Issue 1: Interpretation of section 43B: The judgment involves the interpretation of section 43B of the Income-tax Act, 1961 regarding the disallowance of sales tax paid after the due date. The Assessing Officer disallowed sales tax paid by the assessee after the end of the previous year but before the due date stipulated under the Himachal Pradesh Sales Tax Act, invoking section 43B of the IT Act. The CIT(A) reversed this decision, but the Tribunal, following previous judgments, upheld the disallowance. Issue 2: Applicability of the proviso: The judgment discusses the proviso added by the Finance Act, 1987 to section 43B, stating that it does not apply if the sum is paid by the assessee on or before the due date for filing the return of income. The Supreme Court in Allied Motors (P.) Ltd. v. CIT held this proviso to be curative in nature with retrospective effect, impacting the interpretation of section 43B. Issue 3: Effect of previous judgments: The Tribunal's decision was influenced by judgments in the cases of Escorts Ltd. and Jamshedpur Motor Accessories Stores, which were later overruled by the Delhi High Court in the case of Allied Motors (P.) Ltd. The judgment in this case sets aside the Tribunal's decision based on the overruled judgments. Issue 4: Impact of Supreme Court decision: The Supreme Court's decision in Allied Motors (P.) Ltd. v. CIT regarding the retrospective effect of the proviso to section 43B is crucial in understanding the application of this provision. The judgment emphasizes the need to consider this decision while interpreting and applying section 43B in relevant cases. Issue 5: Timeline of filing return and payment: Considering the timeline of events, including the filing of the return on 27-7-1984 and the payment of sales tax liability on 27-4-1984, the judgment remands the matter to the Tribunal for appropriate orders. The Tribunal is instructed to consider the Supreme Court's judgment in Allied Motors (P.) Ltd. case while revisiting the issue. This detailed analysis of the judgment provides insights into the interpretation of section 43B of the Income-tax Act, the impact of relevant judgments, and the application of the proviso added by the Finance Act, 1987. The timeline of events and the retrospective effect of the proviso play significant roles in the resolution of the legal issues addressed in this case.
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