PINAKI CHANDRA GHOSE,J. - (1.) THIS appeal was admitted on the following substantial questions of law: For the asst. yr. 1989 -90: (i) Whether the Tribunal was justified in law in holding that disallowance under Section 43B in respect of provident fund could be made in proceedings under Section 154 for rectification of intimation issued under Section 143(1)(a)? (ii) Whether and in any event the Tribunal was justified in law in holding that opportunity was granted to the appellant before passing the order under Section 154 and issuing the revised intimation and its purported findings in that behalf are arbitrary, unreasonable and perverse? (iii) Whether and in any event the order under Section 154 and revised intimation both bearing the dt. 6th Feb., 1995 served on the appellant on 11th Dec, 1996 were barred by limitation and the Tribunal was justified in law in not deciding the said contention and its purported findings in that behalf are arbitrary, unreasonable and perverse ? (iv) Whether and in any event the Tribunal was justified in law in upholding the disallowance of provident fund contribution actually paid by the appellant on the ground that payment was not made within the statutory period ? For the asst. yr. 1994 -95 the appeal was also admitted on the following substantial questions of law: (i) Whether the Tribunal was justified in law in holding that disallowance under Section 43B in respect of provident fund could be made as a prima facie adjustment under Section 143(1)(a)? (ii) Whether and in any event the Tribunal was justified in law in upholding the disallowance of provident fund contribution of Rs. 10,78,236 relating to earlier year which was disallowed in that year and claimed by the appellant on the basis of actual payment in the asst. vr. 1994 -95 ? (iii) Whether and in any event the Tribunal was justified in law in upholding the disallowance of provident fund contribution of Rs. 3,43,053 relating to the asst. yr. 1994 -95 paid by the appellant before the due date for filing of the return for the said assessment year ? (iv) Whether and in any event the Tribunal was justified in law in not directing the AO to restrict the disallowance to Rs. 6,15,309.50 representing the amount unpaid as on 31st March, 1994 out of the total sum of Rs. 6,50,319 debited to the P&L; a/c for the previous year ended 31st March, 1994 and its purported findings in that behalf are arbitrary, unreasonable and perverse?
(2.) THE question which was raised before the Court in question No. (i) for the asst. yr. 1989 -90 and for the asst. yr. 1994 -95 relate to the jurisdiction of the AO to pass an order under Section 154 amending the intimation under Section 143(1)(a) and to make a prima facie adjustment in an intimation issued under Section 143(1)(a). It is submitted by the learned Counsel that if the said questions for the two assessment years are decided in favour of the assessee, it would not be necessary to decide the other questions. The facts of the case briefly are as follows: The assessee declared a loss for the previous year ended on 31st March, 1989 after debiting a sum of Rs. 4,03,321 as provident fund expenditure. After taking into account the said expenditure, the total loss incurred by the assessee for the said previous year is Rs. 16,98,549. Subsequent thereto on 30th June, 1990 an intimation was issued under Section 143(1)(a) of the IT Act, 1961 by the AO accepting the return showing such loss. Subsequent thereto on 11th Dec, 1996, the assessee received an order under Section 154 of the Act along with a revised intimation both dt. 6th Feb., 1995. By the said order the AO disallowed payment towards provident fund for a sum of Rs. 4,03,321 under Section 43B and reduced the return loss to Rs. 12,85,267.
(3.) BEING aggrieved, the assessee preferred an appeal before Commissioner of Income -tax (Appeals) [hereinafter referred to as 'the CIT(A)']. Such appeal was filed on the question of the jurisdiction of the AO and it is admitted that the order and the revised intimation dt. 6th Feb., 1995 was duly served by registered post on 9th Dec, 1996 by the Department and received by the assessee on 11th Dec., 1996. According to the appellant the said revised (sic -intimation and) rectification order were time -barred. After hearing the parties the said appellant (sic) had rightly invoked Section 154 and disallowed the provident fund. The assessee preferred an appeal before the learned Tribunal since the question of limitation was not decided by the CIT(A) on the question that the said revised intimation and the order both were passed without service of notice under Section 154 and were time -barred. Such points were also canvassed before the learned Tribunal and on merits it was submitted that the contribution paid towards provident fund by the assessee in terms of the order passed by the Hon'ble Court and as such was required to be treated as having been paid within the due date and could not be disallowed under Section 43B.;