2020 (12) TMI 1315 - HC - Income Tax

Addition u/s 43B - interest paid to Government of Tamil Nadu - ITAT said matter should go back to the A0 to verify as to whether assessee paid the interest to Government of Tamil Nadu or to any other financial institution or it is only a provision made - HELD THAT - Against the remand order of the Tribunal, we do not find any substantial question of law to be arising in the present case and therefore, the Assessing Authority may take action in accordance with law in pursuance of the remand order of the learned Tribunal.

Summary

Issues:
1. Appeal against the order of the Income Tax Appellate Tribunal for Assessment Year 2007-08.
2. Interpretation of Section 43B of the Income Tax Act regarding interest paid to the Government of Tamil Nadu.
3. Verification of payment made by the assessee to the Government of Tamil Nadu.
4. Assessment of the applicability of Section 43B to the payments made.
5. Lack of passing any order by the Assessing Authority on the remand by the Tribunal.

Analysis:
The High Court of Madras dealt with an appeal filed by the Revenue against the order of the Income Tax Appellate Tribunal for the Assessment Year 2007-08. The Tribunal had directed the Assessing Officer to verify whether the assessee had paid interest of ?183.90 lakhs to the Government of Tamil Nadu or any other financial institution. The Tribunal had held that the interest paid to the Government of Tamil Nadu was not covered by the provisions of Section 43B of the Income Tax Act. The High Court noted that the Assessing Authority had not passed any order on the remand by the Tribunal. The Court found no substantial question of law arising from the remand order and directed the Assessing Authority to take action in accordance with the law based on the Tribunal's remand order.

The primary issue revolved around the interpretation of Section 43B of the Income Tax Act concerning the interest paid to the Government of Tamil Nadu. The Tribunal's decision highlighted that if the amount was paid to the Government of Tamil Nadu, Section 43B would not apply to such payments. The Court emphasized the need for the Assessing Officer to verify the actual payment made by the assessee and to assess whether the provisions of Section 43B were applicable to the payments. The Court's decision focused on ensuring compliance with the law and providing the assessee with an adequate opportunity to address the issue.

In conclusion, the High Court disposed of the Tax Case Appeal, emphasizing that no costs were to be incurred. The judgment underscored the importance of the Assessing Authority taking necessary action based on the Tribunal's remand order and conducting a fresh examination of the issue in accordance with the law. The case highlighted the significance of verifying payments made to the Government of Tamil Nadu and determining the applicability of Section 43B to such transactions.