THE COMMR. OF INCOME TAX-III, LDH V. M/S MOHINI HOSIERY MILLS

ITA/173/2006

AI Insights

The case involves an appeal by the Commissioner of Income Tax-III Ludhiana against M/s. Mohini Hosiery Mills Ludhiana concerning the disallowance of deductions for late deposits of PF, ESI, and EPF payments. The primary legal issue was whether the Income Tax Appellate Tribunal (ITAT) was correct in allowing these deductions despite the payments being made after the due dates. The Tribunal and the CIT(A) had previously ruled in favor of the assessee, leading to the Revenue's appeal to the High Court. The High Court, referencing the Supreme Court's decision in Alom Extrusions Ltd., upheld the lower authorities' decisions, dismissing the Revenue's appeal.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 719348 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 01-12-2010
• Assessment Year: misc
• Other Referred Cases: Allied Motors (P) Ltd. Vs. CIT, Commissioner of Income Tax v. Alom Extrusions Ltd., The Commissioner of Income Tax Patiala v. M/s. Rai Agro Industries Ltd. Sangrur
• Laws Referred To: Income-Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: DINESH GUPTA
• Keywords: Assessment Year; Deduction; EPF; ESI; Income Tax; Late deposit; PF; Tribunal
• Section: 143(3); 43B; 260A; 36(1)(va)

Judgement Text

" Income Tax Appeal No. 173 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. --- Income Tax Appeal No. 173 of 2006 Date of decision: 1.12.2010 Commissioner of Income Tax-III Ludhiana --- Appellant Versus M/s. Mohini Hosiery Mills Ludhiana --- Respondent CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL --- Present: Mr. Dinesh Gupta, Standing Counsel for the appellant-Revenue. None for the respondent-assessee. --- AJAY KUMAR MITTAL, J. This order will dispose of Income Tax Appeal Nos. 173 of 2006 and 159 of 2007 as similar issues of law are involved in both of them. Income Tax Appeal No. 173 has been filed under Section 260A of the Income-Tax Act, 1961 (for short “the Act”) by the Revenue against the order dated 29.7.2005, passed by the Income Tax Appellate Tribunal, Chandigarh Bench ‘A’ Chandigarh (in short “the Tribunal”) in ITA No283/CHANDI/2003, relating to the assessment year 1998-99. Income Tax Appeal No. 173 of 2006 2 The appeal was admitted on 7.9.2006 for determination of the following substantial questions of law by this Court: 1- Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in allowing claim of deduction under Section 36(1) (va) read with Section 43B in respect of late deposits of payment of PF, ESI and EPF” 2- Whether on the facts and in the circumstances of the case the Hon’ble ITAT was right in law in relying on the judgment of the Hon’ble Supreme Court in the case of Allied Motors (P) Ltd. Vs. CIT (1997) reported in 224 ITR 677 because this judgment relates to Sales tax collected up to 31st March but not paid to the Sales Tax Department till 31st March in view of the time allowed for such payment under the Sales Tax Act.” 3- Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in holding that the amendment made in 43B(b) w.e.f. 1.4.2004 was retrospective?” The facts, in brief, necessary for adjudication as narrated in the appeal, are that the respondent-assessee derived income from manufacturing and sale of hosiery goods. While completing assessment under Section 143(3) of the Act, the assessing officer by order dated 20.3.2001, disallowed deduction of Rs. 47,075/- and Rs. 2,73,353/- in view of provisions of Section 36(1)(va) read with Section 43B of the Act as the payments in respect of PF, ESI and EPF were found to have been made after the “due date”. The Commissioner of Income Tax Appeal No. 173 of 2006 3 Income-tax (Appeals) {in short “the CIT(A)”}, accepted the appeal of the assessee and deleted the entire additions. The Tribunal upheld the order of the CIT(A) by the order under appeal. It is how the Revenue is in appeal before us. Learned counsel for the Revenue very fairly accepts that the issues raised in the instant appeal stand concluded by the apex Court’s judgment in Commissioner of Income Tax v. Alom Extrusions Ltd. (2009) 319 ITR 306 (SC) and this Court in Income Tax Appeal No. 663 of 2005 (The Commissioner of Income Tax Patiala v. M/s. Rai Agro Industries Ltd. Sangrur) decided on 30.11.2010, in favour of the assessee and against the Revenue. The substantial questions of law are, thus, answered against the Revenue and in favour of the assessee. Resultantly, the appeals are dismissed. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL) December 1, 2010 JUDGE *rkmalik* "