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2006 (3) TMI 262 - ITAT MADRAS-APayment towards contribution to Provident Fund before the due date - Whether amendment in proviso to section 43B by Finance Act, 2003 could be construed to be curative, as such retrospective in nature? - HELD THAT:- As per the prescription of section 43B of the Act, deduction for statutory payments pertaining to labour, taxes etc. are to be allowed as deductions, if they are actually paid during the financial year. However, to mitigate the unintended hardship it is stipulated in the proviso that taxes are deemed to have been paid during the B financial year even if they are paid by the due date of filing of return. In the case of statutory payment relating to labour, it was sine qua non to make the payment anytime before the last date for payment of labour-related liability. It was represented before the Government that the delayed payment of statutory liability related to labour should be accorded the same treatment as delayed payment of taxes etc. The deduction if denied in a year could not be claimed in subsequent year. On account of various reasons like postal delay, strikes or long holidays, the payment of employer's contributions to the respective authorities at times delayed even though the payment tendered before the due date. Having regard to this unintended hardship, by the Finance Act, 2003 in the first proviso of section 43B, the words, brackets and letters referred to in clause (c) or clause (d) or clause (e) or clause (f) have been omitted and second proviso was also omitted. Legislature removed the differentiation between employee welfare payments and others. Uniform criteria was prescribed for the allowability of the claim. The amendment was made to eliminate unintended consequences that caused undue hardship to the taxpayers. Therefore, amendment in proviso to section 43B by Finance Act, 2003 was curative in nature. Accordingly, it should be applied retrospectively. As regards the intervener, we have not examined the facts of the case. The regular Bench while deciding these appeals may keep in view the principles laid down in this case. In the result, appeal of the assessee stands allowed.
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