Wed. Apr 21st, 2021

Rites Limited vs Commissioner Of Income Tax, … on 3 July, 2017

1 min read

2. The facts in brief are that the Petitioner, Rites Limited, is a Government
of India Undertaking engaged in the business of providing technical
consultancy services in India and abroad. It is stated that pursuant to the
recommendation of the 5th Pay Commission in respect of revised salary with

W.P. (C) 5331 of 2014 Page 1 of 11
effect from 1st January 1996, the Petitioner made a provision of wages
arrears in the books of Financial Year (‘FY’) relevant to the Assessment
Year (‘AY’) 1997-98 in the sum of Rs. 2,50,00,000.

3. However, since the relevant notification giving effect to the Pay
Commission recommendations was issued only on 4th March 1998, the
Assessing Officer (‘AO’) disallowed in AY 1997-98 the claim in respect of
the revised salary. This disallowance was upheld by the CIT(A) in AY 1997-
98 confirming the action of the AO on the ground that the notification dated
4th March 1998 was relevant to AY 1998-99. Significantly, the CIT(A)
observed that the claim could be considered in AY 1998-99. However, by
the time the order of the CIT(A) was issued, the assessment for AY 1998-99
was complete, and in the return filed for the said AY, no claim for provision
for arrears of wages was made.

Source: Indian Kanoon

Leave a Reply