# Commissioner of Income Tax, Meerut v. Seth B.D. Gupta

- **Citation:** (2007) 2 ILRA 593
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2007-05-02
- **Case number:** Income Tax Reference No. 101 of 1991
- **Bench:** Sushil Harkauli, Ajai Kumar Singh
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/commissioner-of-income-tax-meerut-v-seth-b-d-gupta-40964
- **Pages:** 2

## Headnote

Income Tax Act, 1961-Section 43-BExumption
from
Tax-claimed-the
Employer on employees' contribution to
Provident Fund, family pension-state
insurance-if actually paid-but not on
liability.

Held: Para 8

Thus our answer to the referred question
is that the Appellate Tribunal was not
right in saying that the employer's
contribution to Provident Fund, Family
Pension, State Insurance and deposit
linked insurance was not disallowable
under section 43 B. In fact, the said
contributions, which may have been
payable had not been actually paid
during the relevant year, were liable to
be disallowed.
Case law discussed:
1988 (173) ITR 708
(2006) 287 ITR-80
594 INDIAN LAW REPORTS ALLAHABAD SERIES [2007

## Text

2 All] Commissioner of Income Tax, Meerut V. Seth B.D. Gupta
593
extreme measure, but to preserve the
proceedings of the courts from being
deflected or interfered with and to keep
the streams of justice pure, serene and
undefiled, it becomes the duty of the
court, though painful to punish the
contemnor in order to preserve its dignity.
No one can claim immunity from the
operation of the law of contempt if his act
or conduct in relation to court or court
proceedings
interferes
with
or
is
calculated to obstruct the due course of
justice".

18. In the present case before us, the
conduct of the contemnor being an
advocate
clearly
comes
under
the
definition of contempt of court as defined
under Section 2(c) of the Contempt of
Courts Act 1971 and is punishable under
Section 12 of the said Act. The charge
against the contemnor is fully proved.

19. Consequently, the reference is
allowed and the contemnor Jyoti Swaroop
Singh, Advocate, Allahabad is convicted
under Section 12 of Contempt of Court
Act and is sentenced to undergo simple
imprisonment for a period of one month
and to pay fine of Rs. 5000/(Five
thousand only) and in default of payment
of fine, he shall further undergo simple
imprisonment of two weeks and in that
case,
both
the
sentences
will
run
consecutively.

20. However, the punishment so
imposed shall be kept in abeyance for a
period of sixty days to enable the
contemnor to approach the Hon'ble
Supreme Court, if he so desires. He shall
be taken into custody to serve out the
sentences immediately after expiry of
sixty days, if no stay order is obtained
from Hon'ble Supreme Court in the
meantime.

21. Let the matter come up before
this Court on 4th April 2007 for ensuring
compliance.
Reference allowed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 02.05.2007

BEFORE
THE HON'BLE SUSHIL HARKAULI, J.
THE HON'BLE AJAI KUMAR SINGH, J.

Income Tax Reference No. 101 of 1991

Commissioner of Income Tax , Meerut

...Applicant
Versus
Seth B.D. Gupta

...Respondent

Counsel for the Applicant:
S.C.

Counsel for the Respondent:

Income Tax Act, 1961-Section 43-BExumption
from
Tax-claimed-the
Employer on employees' contribution to
Provident Fund, family pension-state
insurance-if actually paid-but not on
liability.

Held: Para 8

Thus our answer to the referred question
is that the Appellate Tribunal was not
right in saying that the employer's
contribution to Provident Fund, Family
Pension, State Insurance and deposit
linked insurance was not disallowable
under section 43 B. In fact, the said
contributions, which may have been
payable had not been actually paid
during the relevant year, were liable to
be disallowed.
Case law discussed:
1988 (173) ITR 708
(2006) 287 ITR-80
594 INDIAN LAW REPORTS ALLAHABAD SERIES [2007
(Delivered by Hon'ble Sushil Harkauli, J.)

1. We have heard learned counsel
for the Income Tax Department.

The question referred in this case is:-

"Whether, on the facts and in the
circumstances of the case, the Appellate
Tribunal is legally correct in holding that
liability relating to the employeer's
contribution to Provident Fund, Family
Pension, State Insurance and Deposit
Linked Insurance is not disallowable u/s
43-B of the I.T. Act, 1961?"

2. The issue precisely is whether the
contribution payable, but not actually
paid, is entitled to be claimed as
deduction by the employer/assessee.

3. The words of Section 43 B in the
title to that section, as also at the end of
that
section
limit
the
allowing
of
deductions only to actual payments.

4. Reliance is placed in the
Tribunal's order, upon a decision of the
Andhra Pradesh High Court in the case of
S.Subba Rao & Co and others Vs. Union
of India (1988) 173 ITR 708, for the
conclusion that deductions can be made
although actual payment has not been
made, if the contribution is payable.

5. The Andhra Pradesh High Court
has not held any such proposition in that
decision and the Tribunal's order dated
6.10.1989
is
based
upon
a
total
misreading and misapplication of that
decision.

6. The view taken by the Karnataka
High Court in the case of CIT Vs. Amco.
Batteries (2006) 287 ITR 80 at the end of
para 7 of that law report lays down the
correct law in the following words:-

"Therefore, unless the aforesaid
sums are paid, as a matter of fact, the
employer/ assessee is not entitled to claim
deductions."

7. We approve the decision of the
Karnataka High Court in respect of the
contribution contemplated under Section
43 B of the Income Tax Act.

8. Thus our answer to the referred
question is that the Appellate Tribunal
was not right in saying that the employer's
contribution to Provident Fund, Family
Pension, State Insurance and deposit
linked insurance was not disallowable
under section 43 B. In fact, the said
contributions, which may have been
payable had not been actually paid during
the relevant year, were liable to be
disallowed.

9.

Reference
disposed
of
accordingly.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 25.05.2007

BEFORE
THE HON'BLE TARUN AGARWALA, J.

Civil Misc. Writ Petition No23440 of 2007

Committee of Management, Sri Kachcha
Baba Inter College, Jalhopur Varanasi
and others

...Petitioners
Versus
Regional Committee Pancham Mandal,
Varanasi and others
...Respondents

Constitution
of
India-Art.
226-Locus
Standi-Petition challenging the validity
of committee of management-by the