South India Corporation Ltd, Cochin v. DCIT, Ernakulam

MA 33/COCH/2010 | 1998-1999
Pronouncement Date: 29-10-2010

Appeal Details

RSA Number 3321924 RSA 2010
Assessee PAN AADCS3193C
Bench Cochin
Appeal Number MA 33/COCH/2010
Duration Of Justice 4 month(s) 22 day(s)
Appellant South India Corporation Ltd, Cochin
Respondent DCIT, Ernakulam
Appeal Type Miscellaneous Application
Pronouncement Date 29-10-2010
Appeal Filed By Assessee
Bench Allotted DB
Tribunal Order Date 29-10-2010
Date Of Final Hearing 03-09-2010
Next Hearing Date 03-09-2010
Assessment Year 1998-1999
Appeal Filed On 07-06-2010
Judgment Text
IN THE INCOME TAX APPELLAT E TRIBUNAL COCHIN BEN CH COCHIN BEFORE S/SHRI N.VIJAYAKUMARAN JM AND SANJAY AR ORA AM SOUTH INDIA CORPORATION LTD. RANI MEYYAMMAI BUILDING K.P.K. MENON ROAD WILLINGDON ISLAND KOCHI-682003. [PAN : AADCS 3193C] VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2(1) RANGE-2 ERNAKULAM. (ASSESSEE -APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI V.JAYARAMAN CA-AR REVENUE BY SHRI T.J. VICNENT DR O R D E R PER SANJAY ARORA AM: THESE ARE THREE MISCELLANEOUS PETITIONS BY THE ASS ESSEE FOR THE ASSESSMENT YEARS 1996-97 1998-99 AND 2000-01 SEEKING RECTIFICATION OF THE T RIBUNALS ORDER DATED 16.2.2007 ( IN I.T.A. NOS. 1211 & 1212/COCH/2004 AND 973/COCH/2005) IN IT S CASE. 2. ONE OF THE ISSUES RAISED AND DECIDED BY THE TRIB UNAL PER ITS IMPUGNED ORDER WAS IN RESPECT OF DISALLOWANCES U/S. 43B(B) OF THE INCOME-TAX ACT 1961 ('THE ACT' HEREINAFTER) WHICH STOOD CONFIRMED AGAINST THE ASSESSEE FOLLOWING THE DECISI ON BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE I.E. SOUTH INDIA CORPORATION LTD VS. CIT (2000) 242 ITR 114 (KER). 3. THE ASSESSEE NOW CONTENDS THAT THE ISSUE HAS SIN CE BEEN DECIDED IN ITS FAVOUR IN VIEW OF THE DECISION BY THE APEX COURT IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD . (2009) 319 ITR 306 (SC). SECTION 43B STANDS AMENDED VIDE AN OMISSION OF CLAUSES LISTED IN THE SECOND PROVISO THERETO BY THE FINANCE ACT 2003. THE SAME BRINGS A BOUT A PARITY OF TREATMENT BETWEEN THE PAYMENTS COVERED BY CLAUSE (B) THEREOF WITH THOSE S PECIFIED UNDER ITS OTHER CLAUSES. AS SUCH THOUGH EFFECTIVE 1.4.2004 HAS BEEN READ AS BEING E FFECTIVE FROM 1/4/1989 BY THE HONBLE APEX M.P. NOS. 33 34 & 36/COCH/20 10 (ARISING OUT OF I.T.A. NOS.1211 & 1212/COCH/2004 & 973/COCH/2005) ASSESSMENT YEARS : 1996-97 1998-9 9 & 2000-01 M.P.NOS. 33 34 & 36/COCH./2010 2 COURT VIDE ITS SAID DECISION HOLDING THAT THE AMEN DMENT WAS ONLY TO MITIGATE AN UNINTENDED HARDSHIP THAT THE PROVISION HAD CAUSED. AS SUCH I TS APPEAL BE RESTORED FOR GIVING EFFECT TO THE SAID DECISION BY THE HONBLE APEX COURT. 4. THE LD. DR DURING HEARING OBJECTED TO THE SAME BY ARGUING THAT THERE IS NO CONTROVERSY THAT IT IS THE PREROGATIVE OF THE LEGISLATURE TO MA KE ANY AMENDMENT TO THE ACT EITHER PROSPECTIVE OR RETROSPECTIVE FROM A PARTICULAR DATE. AS SUCH WHEN THE AMENDMENT IN QUESTION IS WITH REFERENCE TO A SPECIFIED DATE I.E. 1.4.2004 IT C OULD NOT BE READ AS BEING SO FROM APRIL 1 1988 I.E. AS HELD BY THE HONBLE APEX COURT. THE COURT S OF LAW ARE ONLY TO INTERPRET THE LAW AND CANNOT USURP THE LEGISLATIVE FUNCTION. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI AL ON RECORD. 5.1 THERE IS NO DOUBT WITH REGARD TO THE SCOPE OF THE DECISION BY THE HONBLE APEX COURT WHICH HAS BEEN RENDERED BY IT BY RELYING ON ITS EARLIER D ECISION IN THE CASE OF ALLIED MOTORS PVT. LTD. VS. CIT (1997) 224 ITR 677 (SC). THE PROVISO IT EXPLAINS AS IT STOOD PRIOR TO THE IMPUGNED AMENDMENT HAD LED TO UNINTENDED CONSEQUENCES AND WA S BROUGHT ABOUT ONLY TO MAKE THE SECTION WORKABLE SO THAT IT HAD TO BE READ RETROSPECTIVELY I.E. READING THE SECTION AS A WHOLE. 5.2 ONCE THE APEX COURT HAS HELD SO THE SAME IS BI NDING ON ALL THE COURTS AND TRIBUNALS IN INDIA AND THE REVENUE IF AGGRIEVED WOULD BE REQU IRED TO CHALLENGE THE SAME UNDER THE DUE PROCESS OF LAW. THE SAME UNTIL REVERSED OR MODIFI ED BY THE HONBLE APEX COURT IS THE LAW OF THE LAND. 5.3 IN VIEW OF THE FOREGOING FOLLOWING THE DECI SION BY THE APEX COURT IN THE CASE OF ACIT VS. SAURASHTRA KUTCH STOCK EXCHANGE LTD . (2008) 305 ITR 227 (SC) WE HEREBY RECALL THE ORD ER OF THE TRIBUNAL INSO- FAR AS IT RELATES TO THE DISALL OWANCE/S U/S. 43B(B) OF THE ACT AND THE REGISTRY I S DIRECTED TO FIX THE APPEALS FOR HEARING IN THE REGU LAR COURSE. HERE WE MAY CLARIFY THAT ASSESSEE HAS AT LEAST I N RESPECT OF ONE YEAR CLAIMED A RECALL OF THE IMPUGNED ORDER QUA THE DISALLOWANCE IN RESPECT OF EMPLOYEES CONTRIBU TION AS WELL. THE SAME STANDS EFFECTED AND SUSTAINED U/S. 2(24)(X) R.W.S. 36(1)(VA) OF THE ACT. SECTION 43B(B) ONLY CONCERNS THE CONTRIBUTIONS BY THE EMPLOYER TO THE E MPLOYEES WELFARE FUNDS AND NOT THE M.P.NOS. 33 34 & 36/COCH./2010 3 EMPLOYEES CONTRIBUTION. FURTHER THE SECTION STIPU LATES AN OVERRIDING CONDITION SO THAT IT COMES INTO OPERATION ONLY WHERE THE DEDUCTION IS OTHERWIS E PERMISSIBLE UNDER THE ACT. SECTION 36(1)(VA) ITSELF PROVIDES FOR PAYMENTS WITHIN `DUE DATE AS THE CONDITION FOR ALLOWANCE OF THE SUMS BEING THE EMPLOYEES CONTRIBUTION COVERED TH ERE-UNDER AND WHICH HAS NOT AS THE DISALLOWANCE EFFECTED ITSELF SHOWS BEEN MET. AS SU CH THE QUESTION OF TRAVELLING TO OR THE OCCASION TO APPLY SECTION 43B DOES NOT ARISE. IN FACT THE TIME FRAME FOR PAYMENT STIPULATED U/S. 36(1)(VA) IS MORE STRINGENT THAN SECTION 43B (AS AM ENDED) AND REMAINS UNCHANGED AND THE DISALLOWANCE HAS BEEN EFFECTED U/S. 2(24)(X) R.W.S. 36(1)(VA) ONLY I.E. DE HORS AND WITHOUT REFERENCE TO S. 43B(B). FURTHER STILL EVEN IF FOR ARGUMENT SAKE IT COULD BE SAID THAT A DIFFERENT VIEW IN THE MATTER IS POSSIBLE THE SAME CANNOT BE A SUBJECT MATTER OF RECTIFICATION U/S. 254(2) WHICH IT IS WELL SETTLED IS TO BE RESTRICTED TO MIS TAKES APPARENT FROM THE RECORD (REFER: AMRIT LAL JINDAL & SONS VS. WTO 327 ITR 161 (P&H)). THE SAID DISALLOWANCE/S THER EFORE CANNOT BE SUBJECT TO RECALL. SUBJECT TO THESE OBSERVATIONS WE UPHOLD THE ASSESSEES APPLICATION/S. 6. IN THE RESULT THE ASSESSEES MISECELLANEOU S APPLICATIONS ARE ALLOWED ON THE AFORESAID TERMS. SD/- SD/- (N.VIJAYAKUMARAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 29TH OCTOBER 2010 GJ COPY TO: 1. SOUTH INDIA CORPORATION LTD. RANI MEYYAMMAI BUI DLING K.P.K. MENON ROAD WILLINGDON ISLAND KOCHI - 682 003. 2. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-2 (1) RANGE-2 ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX(APPEALS)-II KOC HI. 4. THE COMMISSIONER OF INCOME-TAX KOCHI. 5. D.R. I.T.A.T. COCHIN BENCH COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) M.P.NOS. 33 34 & 36/COCH./2010 4