2007 (11) TMI 39 - HC - Income Tax

Deduction u/s 43B- As per Section 43B of the Act deduction allowable to assessee of PF and ESI respectively which is paid within two or three days but before filing of return hence deduction allowable to assessee

Summary

Issues:
1. Disputed addition of Provident Fund and Employees State Insurance amounts by the Assessing Officer.
2. Interpretation of Section 43B of the Income Tax Act, 1961.
3. Applicability of a decision by the Gauhati High Court and the subsequent Supreme Court order.
4. Reversal of decision by the Commissioner of Income-tax (Appeals).
5. Consideration of substantial question of law.

Analysis:

1. The case involved a dispute over the addition of amounts for delayed payment of Provident Fund and Employees State Insurance by the Assessing Officer. The Assessee argued that the payments were made within the grace period under Section 43B of the Income Tax Act, 1961, before filing the return, and contended it was a technical default.

2. The Assessing Officer and the Commissioner of Income Tax (Appeals) upheld the addition, but the Tribunal reversed their decision. The Assessee cited a decision of the Gauhati High Court, supported by a Supreme Court order, which clarified the entitlement to claim benefits under Section 43B for the relevant period, especially if the provident fund contribution was made before filing the return.

3. The Tribunal found the Supreme Court decision applicable to the present case, leading to the dismissal of the appeal. The Tribunal concluded that no substantial question of law arose for consideration in this matter.

4. The Tribunal's judgment highlighted the importance of the Gauhati High Court decision and the subsequent Supreme Court order in interpreting the provisions of Section 43B of the Income Tax Act, 1961. The reversal of the Commissioner of Income-tax (Appeals) decision was based on the clarification provided by the higher courts.

5. The Tribunal dismissed the appeal, indicating that similar cases raising the same issue would be listed for directions, ensuring consistency in the application of the legal principles established in the present judgment. The decision provided clarity on the interpretation of the law regarding delayed payments of Provident Fund and Employees State Insurance under Section 43B.