TMI Blog2007 (11) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... ith D.S. Kale for the appellant. R.L. Jain with Ku. V. Mandlik for the respondent. JUDGMENT A. M. Sapre J. - The decision rendered in this appeal shall also govern disposal of other connected appeals being I. T. A. Nos. 39 and 40 of 2005, because all the three appeals involve a common question of law and, secondly, relate to the same assessee except the difference being that each appeal arises out of a different assessment year. 2. This is an appeal filed under section 260A of the Income-tax Act (for brevity called "the Act") by the assessee against an order dated September 24, 2004, passed by the I. T. A. T. in I. T. A. No. 930/Ind/1998. It was admitted for final hearing on the following substantial question of law by this court : "1. Whether in the facts and circumstances of the case, the Tribunal was justified in holding that disallowance of provident fund for the assessment year 1995-96 and the amount deposited towards provident fund and ESI can be allowed to be deducted by taking recourse to the provisions of section 43B of the Income-tax Act ?" 3. The question involved in these appeals arises out of the assessment year 1992-93 (I. T. A. No. 67 of 2004), the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tantial question of law. 5. Heard Shri G. M. Chafekar, learned senior counsel with Shri D. S. Kale, learned counsel for the appellant and Shri R. L. Jain, senior counsel with Ku. Veena Mandlik, learned counsel for the respondent. 6. Learned counsel for the appellant (assessee) in substance urged only one contention. According to him, since the second proviso to section 43B has been omitted from the statute book (i.e., from section 43B) though with effect from April 1, 2004, by the Finance Act, 2003, but the said omission will have its retrospective effect from the date of insertion of section 43B ibid as has been interpreted by the Supreme Court in Allied Motors' case [1997] 224 ITR 677. Learned counsel contended that it is for this reason, the second proviso could not have been made basis for denying the benefit to an assessee for claiming deduction under section 43B ibid because the same was not on the statute book on the date when the assessee made the deposits of contribution. In other words, the submission was that when the Supreme Court in the case of Allied Motors [1997] 224 ITR 677 has held that the proviso appended to section 43B has retrospective operation from the da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him : Provided that nothing contained in this section shall apply in relation to any sum referred to in clause (a) or clause (c) or clause (d) or clause (e) or clause (f) which is actually paid by the assessee on or before the due date applicable in his case for furnishing the return of income under sub-section (1) of section 139 in respect of the previous year in which the liability to pay such sum was incurred as aforesaid and the evidence of such payment is furnished by the assessee along with such return : Provided further that no deduction shall, in respect of any sum referred to in clause (b), be allowed unless such sum has actually been paid in cash or by issue of a cheque or draft or by any other mode on or before the due date as defined in the Explanation below clause (va) of sub-section (1) of section 36, and where such payment has been made otherwise than in cash, the sum has been realized within fifteen days from the due date. Explanation 1.-For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court has also held the amendment inserting the first proviso to be explanatory in the case of Jamshedpur Motor Accessories Stores v. Union of India [1991] 189 ITR 70 (Patna). It has held the amendment inserting the first proviso to be retrospective. The special leave petition from this decision of the Patna High Court was dismissed (see [1991] 191 ITR (St.) 8). The view of the Delhi High Court, therefore, that the first proviso to section 43B will be available only prospectively does not appear to be correct. As observed by G. P. Singh in his Principles of Statutory Interpretation, 4th Edn., page 291, 'it is well-settled that if a statute is curative or merely declaratory of the previous law, retrospective operation is generally intended'. In fact the amendment would not serve its object in such a situation, unless it is construed as retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained." 12. So far as the present case is concerned, it does no relate to the first proviso but relates to the second proviso. In this view of the matter the submission of learned counsel for the appellant (assessee) that the second proviso was held by the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, it is specifically provided in the Finance Act, 2003, itself that omission of the second proviso shall come into effect from April 1, 2004. In the light of such specific date being mentioned in the Act itself, it is difficult to hold that omission will be retrospective in operation, i.e., it shall come into operation prior to April 1, 2004. If the intention of legislation had been to omit the provision retrospectively then it would have been so specified in the Act itself. It was not done. Instead, a specific date (April 1, 2004) was mentioned for bringing the omission in force from that date, i.e., April 1, 2004. In our opinion, therefore, the legislative intent is clear. The omission is prospective in operation and not retrospective as urged. As a necessary corollary, any action taken prior to April 1, 2004, on the basis of the second proviso would be legal and proper. In other words, it was incumbent upon the assessee to have ensured compliance with the second proviso while making payment as an employer by way of contribution to any provident fund scheme, or superannuation fund or gratuity fund or any other fund for the welfare of employees before due date as specified ..... X X X X Extracts X X X X X X X X Extracts X X X X
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