Decided on November 30,1994



M. Ramakrishna, Judicial Member - (1.) THIS appeal is by the assessee aggrieved by the order passed by the CIT (Appeals)-V, Hyderabad, dated 22-3-1994, for the assessment year 1991-92.
(2.) The assessee is a public limited company with State and Central Governments holding 99.5 per cent of the shares. It carries on coal mining business in Andhra Pradesh. For the assessment year 1991-92, the assessee filed return of income, declaring a loss of Rs. 2,04,57,08,048. While processing the return under Section 143(1)(a), the Assessing Officer by invoking the provisions of Section 43B disallowed Rs. 11,99,76,761 which was the outstanding amount payable to Coal Mines Provident Fund Account towards assessee's contribution and administrative charges and determined the loss of the assessee at Rs. 1,92,57,31,287. Though there was no tax liability, the Assessing Officer charged additional tax of Rs. 1,10,37,862 in terms of Section 143(1A). Intimation under Section 143(1)(a) was issued on 3-11-1992. Thereafter, assessee filed a petition under Section 154 on 28-11-1992, which was allowed in part and the additional tax was revised to Rs. 91,45,303, as against Rs. 1,10,37,862 levied originally and the Assessing Officer also reduced the disallowance under Section 43B to Rs. 9,94,05,471 after considering the payment of Rs. 2,05,71,290 made to CMPF A/c within due date and thus finally determined the net loss at Rs. 1,94,63,02,577. In the appellate proceedings before the CIT (Appeals), it was the contention of the assessee that there was no time limit for remittance of recovery towards provident fund in the Coal Mines Provident/Fund and Bonus Scheme Acts, though under the A.P. Coal Mines Provident Fund Scheme, the remittance was to be made before the end of the month following the month to which the recoveries related. It was also contended that the sum of Rs. 11,90,76,761 has been paid to the same CMPF authorities before the date for the filing of the IT Return and therefore the conditions stipulated in Section 43B were satisfied. It is further contended that in a note in Part IV of the return, the grounds for claiming this expenditure have been mentioned and therefore, the disallowance could not be treated as a prima facie adjustment, attracting the levy of additional tax. It was also pleaded that additional tax was not leviable in cases where loss still existed, even after making prima facie adjustments. The learned CIT (Appeals) did not agree with the submissions of the assessee and therefore, dismissed the appeal of the assessee. Hence, assessee is in further appeal before us.
(3.) BEFORE us, the learned counsel for the assessee contended that provisions of Section 43B do not permit the disallowance of this payment which is not due. He also submitted that Explanation 2 to Section 43B of the IT Act, 1961 states that any sum payable' for the purpose of Clause (a) means any sum for which assessee incurred liability during the previous year and since the payment of P.F. falls under Clause (b) of Section 43B, the disallowance could not have been made. He also submitted that the Board of Trustees of the Coal Mines Provident Fund resolved that in case of delay in remittance, the defaulter would be charged interest on the principal amount at 2 per cent higher than the rate at which interest is allowed to the members, which amounts to rescheduling the due dates as the due dates got extended sine die and therefore, payment in accordance with the above resolution should be treated as payment within the time. Hence, provisions of Section 43B are not attracted.;

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