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The Commissioner of Income Tax (Central) v. M/s Sangrur Vanaspati Mills Limited - ITR-168-1995  RD-P&H 7938 (27 September 2006)
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
ITR No.168 of 1995
Date of decision:15.9.2006
The Commissioner of Income Tax (Central) Ludhiana ...Petitioner
M/s Sangrur Vanaspati Mills Limited
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
Present: Mr. SK Garg Narwana, Advocate, for the revenue.
Mr. PC Jain, Advocate for the respondent.
Following question of law has been referred for opinion of this court by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh, arising out of its order dated 24.2.1994, RA No.123/Chandi/1994, in respect of assessment year 1985-86:- "Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in upholding the order of the first Appellate Authority deleting the disallowance of Rs.4,86,537/- made under section 43B of the Income Tax Act by holding that the first proviso to section 43B inserted by Finance Act, 1987 w.e.f 1.4.1988 has retrospective application?" We find that the question stands covered against the revenue by judgment of the Hon'ble Supreme Court in Allied Motors (P) Limited v.
Commissioner of Income Tax, (1997) 224 ITR 677. In the said judgment, ITR No.168 of 1995 2
after referring to circumstances in which Section 43B of the Act was enacted i.e., to take care of the situation where tax payers did not discharge their statutory liability, the Hon'ble Supreme Court referred to circumstances which led to subsequent amendment i.e. hardship to the tax payers who had discharged their liability but were prevented from claiming legitimate deduction, which was not intended by the said provision. The amendment by Finance Act of 1987 was, thus, held to be remedial in nature.
Reference was also made to departmental circular No.550 dated 1.1.1990 (see (1990) 182 ITR (St.) 114, 123). The amendment was held to be retrospective being curative and declaratory. It was observed at page 685:- "...Therefore, section 43B(a), the first proviso to section 43B and Explanation 2 have to be read together as giving effect to the true intention of section 43B. If Explanation 2 is retrospective, the first proviso will have to be so construed. Read in this light also, the proviso has to be read into section 43B from its inception along with Explanation 2."
Accordingly, the question stands answered against the revenue and in favour of the assessee.
(Adarsh Kumar Goel)
Sept. 15, 2006 (Ajay Kumar Mittal)
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