Judgment:
ORDER
On an application filed under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act), the Tribunal has referred the following question :
'Whether, on the facts and in the circumstances of these cases, the Appellate Tribunal erred in law in setting aside the matters to the assessing officer with directions that no disallowances were to be made under section 43B of the Income Tax Act, 1961 of Rs. 6,570/Rs. 5,303/Rs. 24,672/Rs. 13,459 if such payments had been made on or before the due date applicable for furnishing of return of income under section 139(1) of the Income Tax Act, 1961 ?'
2. The assessees are registered firms. The Income Tax Officer found that the assessee had collected sales tax from the customers during the relevant assessment years, which were not deposited during the accounting year in question and, therefore, the claim of deduction of sales tax paid after the accounting year though during grace period has been disallowed by the assessing officer. In appeal before the Commissioner (Appeals), the Commissioner (Appeals) has allowed the appeal holding that if the sales tax has been paid during the grace period, that does not attract the provisions of section 43B of the Act. The view taken by the Commissioner (Appeals) has been upheld by the Tribunal.
3. This issue has now been concluded by the Supreme Court in the case of Allied Motors (P) Ltd. v. CIT : [1997]224ITR677(SC) , their Lordships observed as under :
'This view has been accepted by a number of High Courts. In the case of CIT v. Chandulal Venichand : [1994]209ITR7(Guj) , the Gujarat High Court has held that the first proviso to section 43B is retrospective and sales tax for the last quarter paid before the filing of the return for the assessment year is deductible. This decision deals with assessment year 1984-85, The Calcutta High Court in the case of CIT v. Sri Jagannath Steel Corpn. : [1991]191ITR676(Cal) has taken a similar view holding that the statutory liability for sales tax actually discharged after the expiry of the accounting year in compliance with the relevant statute is entitled to deduction under section 43B. The High Court has held the amendment to be clarificatory and, therefore, retrospective. The Gujarat High Court in the above case held the amendment to be curative and explanatory and, hence, retrospective. The Patna High Court has also held the amendment inserting the first proviso to be explanatory in the case of Jamshedpur Motor Accessories Stores v. Union of India : [1991]189ITR70(Patna) . It has held the amendment inserting first proviso to be retrospective. The special leave petition from this decision of the Patna High Court was dismissed - See (1991) 191 ITR 8. The view of the Delhi High Court, therefore, that the first proviso to section 43B will be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of Statutory Interpretation, 4th Edn., page 291, 'It is well settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended.' In fact the amendment would not serve its object in such a situation, unless it is construed as retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained.'
4. Following the view taken by their Lordships in the case of Allied Motors (P) Ltd. (supra), we find no infirmity in the order of the Tribunal.
5. In the result, we answer the question in negative, as that the Tribunal is right in law in setting aside the order of the assessing officer with direction to the assessing officer not to disallow the amount under section 43B, i.e., in favour of the assessee and against the revenue.
6. Reference so made stands disposed of accordingly.