2012 (11) TMI 897 - SC - Income Tax

Payment of ESI, PF u/s 43B - held that - Revenue has to accept the payment of ESI, PF etc., paid by the assessee and give the deductions of that amount in favour of the assesses as claimed by it in its return - appeal dismissed. Decision in CIT v. Alom Extrusions Ltd. 2009 (11) TMI 27 - SUPREME COURT followed.

Summary

Issues:
1. Delay condonation and leave granted in Special Leave to Appeal (Civil) No. 30327 of 2008.
2. Controversy regarding retrospective application of Finance Act, 2003 in Civil Appeal Nos. 5997 & 5998 of 2012.
3. Interpretation of proviso to section 43B of the Income-tax Act, 1961 in appeals against the common order dated 13.7.2007.

Issue 1: Delay Condonation and Leave Granted (Special Leave to Appeal No. 30327 of 2008)
In this matter, the Supreme Court heard both sides and condoned the delay. Subsequently, leave was granted, and the civil appeals were dismissed with no order as to costs.

Issue 2: Retrospective Application of Finance Act, 2003 (Civil Appeal Nos. 5997 & 5998 of 2012)
The controversy in these civil appeals revolved around the retrospective nature of the Finance Act, 2003. The Court relied on the decision in CIT v. Alom Extrusions Ltd. [2009] 319 ITR 306, which established that the Finance Act, 2003, is curative and retrospective, operating from April 1, 1998. Consequently, the civil appeals were dismissed with no order as to costs.

Issue 3: Interpretation of Proviso to Section 43B of the Income-tax Act, 1961
The appeals under section 260-A of the Income-tax Act, 1961 challenged the proviso appended to section 43B, allowing deduction of PF, ESI, etc., after the close of the accounting period but before the return is filed. The Court noted that the proviso was inserted by the Finance Act, 1987, effective from April 1, 1988. Following this, the appeals by the revenue were dismissed. The Court referenced a previous judgment where similar questions were addressed, emphasizing that the revenue must accept the payments of ESI, PF, etc., made by the assessee and allow deductions claimed in the return. Therefore, based on the precedent and the previous judgment, the appeals were dismissed without delving into the questions further.

This comprehensive analysis of the legal judgment covers the issues of delay condonation and leave granted, retrospective application of the Finance Act, 2003, and the interpretation of the proviso to section 43B of the Income-tax Act, 1961.