Case Note & Summary
The Commissioner of Income Tax, Kolhapur, filed an application under the Income Tax Act, 1961, seeking a direction to the Income Tax Appellate Tribunal to state and refer two questions of law arising from the Tribunal's order dated 5.12.1997. The respondent, Datta Shetkari Sahakari Sakhar Karkhana Ltd., a co-operative sugar factory, had claimed deductions for Government Audit Fees and payments towards Provident Fund (PF), Family Pension (FP), and Administrative charges. The Tribunal held that Government Audit Fees is an expenditure and not a duty, cess or tax under Section 43-B, and therefore deductible. Regarding PF, FP and Admin charges, the Tribunal remanded the matter to the Assessing Officer to verify the dates of payments. The Revenue contended that the Government Audit Fees, being payable to the State Treasury, should be treated as a duty, cess or tax under Section 43-B, and that the second proviso to Section 43-B read with Section 36(1)(va) requires disallowance of payments made beyond the due date under the relevant Act. The High Court, after hearing the counsel for the applicant and perusing the Tribunal's order, found that the Government Audit Fees is not a duty, cess or tax but a fee for compulsory audit, and thus deductible. On the second question, the Court noted that the Tribunal had already remanded the matter for verification of payment dates, and the Revenue's objection regarding the due date requirement was not a pure question of law but a factual verification. Consequently, the High Court dismissed the application, holding that no referable question of law arose.
Headnote
A) Income Tax - Section 43-B - Government Audit Fees - Whether Government Audit Fees payable by a co-operative society is a duty, cess or tax under Section 43-B - Held that Government Audit Fees is not a duty, cess or tax but an expenditure liable to be deducted from income (Paras 1-3). B) Income Tax - Section 43-B read with Section 36(1)(va) - PF, FP and Admin Charges - Whether payment towards PF, FP and Admin charges can be allowed under Section 43-B if made on or before date of filing return - Held that second proviso to Section 43-B read with Section 36(1)(va) requires disallowance of any payment made beyond due date under relevant Act (Paras 1-2).
Issue of Consideration
Whether Government Audit Fees payable by a co-operative society is a duty, cess or tax under Section 43-B of the Income Tax Act, 1961; Whether the Tribunal was justified in directing the Assessing Officer to allow payment towards PF, FP and Admin charges under Section 43-B if made on or before the date of filing of return, despite the second proviso to Section 43-B read with Section 36(1)(va) requiring disallowance of payment beyond due date.
Final Decision
Application dismissed. No referable question of law arises from the Tribunal's order.
Law Points
- Government Audit Fees is not duty
- cess or tax under Section 43-B
- Payment towards PF
- FP and Admin charges must be made within due date under relevant Act for deduction under Section 43-B read with Section 36(1)(va)
