C.I.T. Kolkata - I v. Bata India Ltd
[Citation -2014-LL-1112-28]

Citation 2014-LL-1112-28
Appellant Name C.I.T. Kolkata - I
Respondent Name Bata India Ltd.
Court HIGH COURT OF CALCUTTA
Relevant Act Income-tax
Date of Order 12/11/2014
Judgment View Judgment
Keyword Tags statutory requirement • land revenue
Bot Summary: Whether on the facts and in the circumstances of the case Tribunal was justified in law in holding that assessee was eligible for deduction of the contribution made to the Bata Workers Sickness Benefit Society and that the same was not affected by the provisions of Section 40A(9) of the Income Tax Act, 1961 2. Since the issue 3 involved in the appeal filed by the assessee has already been considered by the Tribunal in the assessee s own case for the assessment year 1991-92 of 1995 329 of 1996 reported in 85 ITD 257 which are as under : 10. The question only is whether the payment made by the assessee to the Society is required by or under any other law for the time being in force. 11 We further observe from the paper book that the said medical benefit to be provided by the assessee to its workers forms a part of the standing orders and rules. The above submissions were made in response to the submissions made by Mr.Nizamuddin, Mr.Sinha and Mrs.Das De espousing the cause of the revenue that the contributions made by the assessee do not come within the meaning of the exception in section 40A(9) of the Income Tax Act, 1961, a contribution as not required by or under any law for the time being in force to be made. We find the contributions made by the assessee in performing the terms of the agreement was also compliance with the statutory requirements. For the reasons above, the questions raised in the said appeal are answered in the affirmative, in favour of the assessee and against the revenue.


ORDER SHEET ITA 468 OF 2004 WITH ITA 219 OF 2009 ITA 24 OF 2009 IN HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ORIGINAL SIDE C.I.T. KOLKATA -I Versus BATA INDIA LTD. BEFORE: Hon'ble JUSTICE SOUMITRA PAL Hon'ble JUSTICE ARINDAM SINHA Date : 12th November, 2014. For Appellants : Md.Nizamuddin,Advocate Mr.R.N.Sinha,Advocate Mrs.Smita Das De,Advocate For Respondents/assessee : Mr.J.P.Khaitan,Senior Advocate Mr.C.S.Das,Advocate Court : Since issues are common in questions raised in three appeals listed together for hearing being ITA No.219 of 2009 relating to assessment years 1983-84, 1984-85, ITA No.24 of 2009 relating to assessment years 1994-95 and 1995-96 and ITA No.468 of 2004 relating to assessment year 1996-97, we take up for purpose of adjudicating questions raised in ITA 468 of 2004 first. 2 This appeal under section 260A of Income Tax Act, 1961 has been preferred by Revenue against order dated 22nd September, 2003 passed by Income Tax Appellate Tribunal Bench, Kolkata in ITA No.117(Cal) of 2000 relating to assessment year 1996-97 and ITA No.263(Cal) of 2000 relating to assessment year 1996-97 on following questions : 1. Whether on facts and in circumstances of case Tribunal was justified in law in holding that assessee was eligible for deduction of contribution made to Bata Workers Sickness Benefit Society and that same was not affected by provisions of Section 40A(9) of Income Tax Act, 1961 ? 2. Whether on facts and in circumstances of case Tribunal was justified in holding that aforesaid contribution is allowable under Section 37(1) of Income Tax Act, 1961 ? Heard Mr.Nizamuddin, learned advocate for revenue in support of this appeal and Mr.Sinha, learned advocate in support of ITA 219 of 2009, Mrs.Das De, learned advocate in support of ITA No.24 of 2009 and Mr.J.P.Khaitan, learned Senior Advocate appearing for respondent in this appeal. We find Tribunal by allowing appeal from which this appeal being ITA 468 of 2004, hereinafter referred to as said appeal , was preferred, had held as under : relevant facts are that assessee debited sum of Rs.59,49,766 as payment to Bata Workers Sickness Benefit Society (BWSBS). Since issue 3 involved in appeal filed by assessee has already been considered by Tribunal in assessee s own case for assessment year 1991-92 (ITA No.1126/Cal/95 vide order dated 24th September, 2002 and also in appeal for assessment year 1987-88 in ITA No.1512/Cal/99, and facts are similar in assessment year under appeal, we following reasons given in aforesaid orders, reject Ground No.I in appeal taken by Department and allow Ground No.1 in appeal filed by assessee. It will be useful to reproduce certain portions of decision of Tribunal in IT Appeal Nos.1126(Cal) of 1995 & 329 (Cal) of 1996 reported in 85 ITD 257 (Kol) which are as under : 10. In this case, there is no dispute that contribution made by assessee was not towards recognized fund or approved superannuation fund or approved gratuity fund. Hence, question only is whether payment made by assessee to Society is required by or under any other law for time being in force. 11 We further observe from paper book that said medical benefit to be provided by assessee to its workers forms part of standing orders and rules. said standing orders and rules have been duly certified under provisions of Industrial Employment (Standing Orders) Act, 1946. As per section 5 of said Act, standing orders have 4 statutory force and any contravention thereof is liable to be punished with fine or prosecution. facts recorded in portions reproduced above are undisputed before us. Mr.Khaitan submitted assessee was involved in setting up said society Bata Workers Sickness Benefit Society, copy of constitution of which he handed up to this Court. objects of said society are as under : 3. objects for which Society is established are :- (a) to provide relief for members during sickness, (b) to provide medicines and medical attendance in all cases of sickness. (c) to provide medical and clinical facilities to members. (d) to establish, undertake, superintend, administer, and contribute to any hospital with view to give further facilities to members. (e) to diffuse among its members information of all matters affecting health and sanitation and to print, publish, issue and circulate such papers, periodicals as may be conducive to any of these objects. (f) to promote and encourage adoption of precautionary measures of all kinds which may seem to Society calculated to prevent 5 disease or spread of same and to minimise danger and mitigate consequences thereof. assessee thereafter entered into collective agreement dated 2nd September, 1986 with Bata Mazdoor Union. Mr.Khaitan submitted such agreement was entered into pursuant to certified standing orders within meaning of Industrial Employment (Standing Orders) Act, 1946. He also submitted said agreement was settlement within meaning of section 2(p) of Industrial Disputes Act, 1947, binding assessee and its workmen under section 18, to attract penalty for breach of any of terms under section 29 of said Act and default made of contribution by assessee in terms of settlement to be recovered in same manner as arrear of land revenue under section 33C of said Act. above submissions were made in response to submissions made by Mr.Nizamuddin, Mr.Sinha and Mrs.Das De espousing cause of revenue that contributions made by assessee do not come within meaning of exception in section 40A(9) of Income Tax Act, 1961, contribution as not required by or under any law for time being in force to be made. We also have before us judgement dated 8th December, 2000 of this Court in exercising writ jurisdiction in case of Bata India Ltd. v. Inspecting Assistant Commissioner of Income-tax & Ors. : 249 ITR 491 (Cal) where it was held as under : 6 Besides, on merits, materials which are unimpeachable in character produced before me, I am satisfied that petitioner has been given deduction lawfully and on justified ground. certified standing order has been produced before me and in terms of certified standing order assessee-writ petitioner has paid aforesaid fund for medical benefit of employee to another body. In previous assessment years, deduction of same head has been allowed. There was no question about it. There is neither any subsequent development nor any occasion to depart from stand taken by Department on earlier occasions. In such circumstances, contention of Mr.Prasad is not acceptable to me either in law or on fact. I decide this question on facts inasmuch as documents produced before me are undisputed and unimpeachable in character. So, I hold that notice is non est and this has been illegally issued and same is liable to be and is hereby set aside. submissions of Mr.Khaitan bear substance. We find contributions made by assessee in performing terms of agreement was also compliance with statutory requirements. agreement does come within meaning of settlement giving it binding force, levy of penalty for breach and recovery of non-payment in terms thereof as statutorily enforceable under Industrial Disputes Act, 1947. position that contributions were made complying with statutory requirement for providing medical benefits to 7 workers of assessee under Standing Orders and Rules duly certified under provisions of Industrial Employment (Standing Orders) Act, 1946 is undisputed as noted above. We find it is also undisputed that by reason of facilities provided by assessee, provisions of Employees State Insurance Act does not apply to its Batanagar factory premises. For reasons above, questions raised in said appeal are answered in affirmative, in favour of assessee and against revenue. questions raised in other appeals are answered accordingly. All appeals are dismissed. Urgent certified copy of this order, if applied for, be furnished to parties on priority basis. (SOUMITRA PAL, J.) (ARINDAM SINHA, J.) ssaha AR(CR) C.I.T. Kolkata - I v. Bata India Ltd
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