Commissioner of Income Tax vs Bharat Bamboo and Timber Suppliers

D.N. Baruah, J.—The following question has been referred by the Tribunal at the instance of the Revenue u/s 256(1) of the Income Tax Act, 1961 :

"Whether, on the facts and in the circumstances of the case and in view of the Explanation 2 to Section 43B as inserted by the Finance Act, 1989, giving retrospective effect from April 1, 1984, the Tribunal has not erred in law in directing the Assessing Officer to allow relief to the extent of the sales tax amount paid even after the close of the accounting period but before the due date of filing the return of income u/s 139(1) of the Income Tax Act, 1961 ?"

We have heard Mr. G.K. Joshi, senior standing counsel for the Income Tax Department, and Dr. A.K. Saraf, counsel for the assessee. Dr. A, K, Saraf submits that the question has been answered by different High Courts, namely, the Andhra Pradesh High Court in Srikakollu Subba Rao and Co. and Others Vs. Union of India and Others, , the Patna High Court, in Jamshedpur Motor Accessories Stores Vs. Union of India (UOI) and Others, , the Kerala High Court in Commissioner of Income Tax Vs. P. Janardhanan Pillai, , the Orissa High Court in Commissioner of Income Tax Vs. Pyarilal Kasam Manji and Co., , the Calcutta High Court in Commissioner of Income Tax Vs. Sri Jagannath Steel Corporation, , the Gujarat High Court in Commissioner of Income Tax Vs. Chandulal Venichand, , the Karnataka High Court in Chief Commissioner (Administration) Vs. Sanjay Sales Syndicate, and the Kerala High Court, in Commissioner of Income Tax Vs. Govindaraja Reddiar, All these High. Courts answered the question in favour of the assessee and against the Department. However, the Delhi High Court answered the question against the assessee in Sanghi Motors v. Union of India [1991] 187 ITR 703 and in Escorts Ltd. v. Union of India [1991] 189 ITR 81.

Following the majority decisions of the High Courts staled above, we answer the question in the affirmative, i.e., in favour of the assessee and against the Revenue.

A copy of this judgment under the signature of the Registrar and the seal of the High Court shall be transmitted to the Income Tax Appellate Tribunal. In the facts and circumstances of the case, there will be no order as to costs.