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2023 (1) TMI 470 - AT - Income TaxDisallowing employees contribution towards ESIC - HELD THAT:- The non-obstante clause has to be understood in the context of the entire provision of Section 43B which is to ensure timely payment before the returns are filed, of certain liabilities which are to be borne by the assessee in the form of tax, interest payment and other statutory liability. In the case of these liabilities, what constitutes the due date is defined by the statute. Nevertheless, the assessees are given some leeway in that as long as deposits are made beyond the due date, but before the date of filing the return, the deduction is allowed. However, cannot apply in the case of amounts which are held in trust, as it is in the case of employees’ contributions-which are deducted from their income. They are not part of the assessee employer’s income, nor are they heads of deduction per se in the form of statutory pay out. They are others’ income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in the particular law. They have to be deposited in terms of such welfare enactments. As upon deposit, in terms of those enactments and on or before the due dates mandated by such concerned law, that the amount which is otherwise retained, and deemed an income, is treated as a deduction. Thus, it is an essential condition for the deduction that such amounts are deposited on or before the due date. If such 34 interpretation were to be adopted, the non-obstante clause u/s 43B or anything contained in that provision would not absolve the assessee from its liability to deposit the employee’s contribution on or before the due date as a condition for deduction. Respectfully following in the case of CHECKMATE SERVICES P. LTD 2022 (10) TMI 617 - SUPREME COURT we dismiss ground raised by the assessee. Deduction u/s 80IA(4) - deduction claimed by assessee on account of income earned from the Gabheni Unit, Surat - HELD THAT:- We note that as per the amended provision of Explanation to Section 80IA, deduction u/s 80IA(4) shall not be allowable to an assessee engaged in the business of developing or operating and maintaining or developing, operating and maintaining any infrastructure facility, the nature of a work contract awarded by any person [including the Central, or State Government] and executed by the undertaking or enterprise referred to Section (1) of Section 80IA. The assessee is executing only a works contract, therefore not eligible for deduction under section 80IA of the Act. Moreover, the assessee has not entered into an agreement with the Central Government or a State Government for developing, maintaining and operating a new infrastructure facility. The legal precedents, which we have cited in case of Ghabine Unit are applicable in this unit also, therefore, we confirm the findings of Assessing Officer and allow the appeal of the Revenue. Deduction u/s 80IA(4) which includes income derived from the Palsana Unit - HELD THAT:- We note that assessee has entered into works contract, hence not eligible for deduction u/s 80IA(4) - Besides, the assessee has not followed the due procedure for establishing Palsana unit. The letter received by assessee from GPCB for its authorization, is not a valid document to claim deduction under section 80IA(4) - Assessee has not entered into an agreement with the Central Government or a State Government or a local authority for developing, maintaining and operating a new infrastructure facility. As per the amended provision of Explanation to Section 80IA inserted by the Finance Act (No.2) 2009 with retrospective effect from 01.04.2000, the deduction under section 80IB(4) claimed by the assessee from the profits and gains of Palsana Unit of the assessee company is not allowable. One of the rules of interpretation of a tax statute is that if a deduction or exemption is available on compliance with certain conditions, the conditions are to be strictly complied with. The legal precedents cited by us in case of Ghabini Unit are squarely applicable to this unit also. Hence, we confirm the findings of the assessing officer and allow the appeal of the Revenue.
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