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TMI Blog1989 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... ns made during the accounting period but not paid to the State Government during the accounting periods and paid thereafter are not allowable by way of deductions, as such collections formed part of the trading receipts, as held by the Supreme Court in the case of CHOWRINGHEE SALES BUREAU P. LTD. vs. CIT (1973) CTR (SC) 44 : (1973) 87 ITR 542 (SC). The ITOs further held that the claim was hit by s. 43B of the IT Act, 1961 (hereinafter referred to as "the Act") having attracted the said provisions, and for that reason also the claim cannot be allowed. The assessees being aggrieved by the orders of the ITOs went in appeal before the AAC of IT. The AAC held a different view and did not agree with the action taken by the ITO's. 3. According to the AAC, collection of sales-tax and additional sales-tax made during the accounting period but paid within the prescribed time limit under the Orissa Sales-tax Act does not become a trading receipt and not attracted by the provisions of s. 43B of the Act. Therefore, the AAC allowed the assessee's claim. The Revenue being aggrieved by the said order, has challenged the same before the Tribunal. The last seven appeals are filed by the assessees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neously. Shri Roy does not dispute that the Explanation is with retrospective effect from 1st April, 1984 and according to him, the provision is also with retrospective effect. His contention is that the proviso takes away the mischief of s. 43B and the word 'payable' must be read as liability allowable on that basis. According to him, if this is not held then the proviso would be come ineffective. 8. On the point of harmonious construction of the proviso Sri Roy relied upon the judgment of the Assam High Court in the case reported in AIR 1967 page 99, the relevant portion at page. 100. According to Sri Roy, there is no contradiction between the Explanation and the proviso. He has contended that the qualification of payment is fulfilled and no constructive explanation can be drawn. He also admits that the Explanation is not ineffective. His last contention is that the claims do not fall within the mischief of s. 43B of the Act. If it is allowed by the proviso then it is hit by the Explanation. 9. As against the arguments advanced on behalf of the assessees, the learned Departmental Representative Sri. S.C. Kanungo filed his written submissions. He firstly contended that the mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1987 w.e.f. the assessment year, 1989-90. It lays down by way of clarification that for the assessment year, 1983-84 and earlier assessment years, if any expenditure by way of tax, duty, cess or fee as mentioned in s. 43B(a) or by way of contribution to any funds like Provident fund, gratuity fund etc., as mentioned in s. 43B(b) has been allowed on accrual basis, then the same expenditure cannot be allowed again in the year in which such payment is actually made by the assessee. 12. Explanation 2 has been inserted by the Finance Act, 1989 with retrospective effect from the assessment year 1984-85. It defines the expression 'any sum payable' used at various places in s. 43B. It would mean a sum for which the assessee has incurred liability in the previous year even though such sum might not have been payable within that year under the relevant law. So far as the language of the relevant portion (Explanation 2) is concerned or its literal interpretation, as has been contended by the learned authorised representative that it is only a definition of 'any sum payable' is not contested. But the only cause for concern on behalf of the Revenue is its retrospective application. 13 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssees and also to recognise the practical difficulty of depositing taxes collected on the last day of the accounting year on the same day. It is important to not that parliament in its wisdom gave effect to this provision from 1st April, 1984 and not from any earlier date. There is absolutely no doubt whatsoever on this point. It does not indicate two reasonable interpretations. 16. The effect of the main section and the proviso was to allow deduction on accrual basis if sums were paid within the time allowed to file the return from the asst. year, 1988-89 and not for the earlier assessment years, namely, asst. yr. 1984-85 to 1987-88. Explanation 2 had not yet been enacted upto 1st April, 1988. The Finance Act, 1988 (introduced in Parliament on 28th Feb., 1988 enacted this Explanation to s. 43B with retrospective effect from 1st April, 1984. Here again, Parliament in its wisdom intended to give effect to this Explanation for the asst. yrs. 1984-85 to 1987-88 also. This Explanation extended the ambit and scope of 'sums payable' to include also those amounts which have not in fact become payable as at the end of the year of accrual under relevant law. 17. In other words, the Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ADI KUPPUSWAMY 1977 CTR (SC) 297 : (1977) 108 ITR 439 (SC). The construction of taxing statute should not be influenced by any consideration of hardship as held by the Supreme Court in the case of SMT. TARULATA SHYAM & ORS. vs. CIT 1977 CTR (SC) 275 : (1977) 108 ITR 345 (SC). If the language of the statute is clear and admits of no ambiguity, recourse to the Statement of Objects and Reasons for the purpose of construing a statutory provision is not permissible, as held by the Supreme Court in the case of GOVIND SARAN GANGA SARAN vs. CST & ORS. (1985) 155 ITR 144 (SC). 21. Harmony is preferable to conflict. But where there is no conflict at all, nothing should be done in the name of harmony, as held by the Supreme Court in the case of CWT vs. YUVRAJ AMRINDER SINGH (1985) 49 CTR (SC) 211 : (1985) 156 ITR 525 (SC). Sec. 43B is a substantive provisions so far as the main section is concerned as it effects the total income liable to tax. But the proviso carves out an exception out of the main section which the main section is made inapplicable. The meaning of the item used in the main section does not affect the said proviso in any way. Those three enactments operate in three differen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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