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TMI Blog2007 (11) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessment year 1994-95 (I.T.A. No. 40 of 2005) and the assessment year 1995-96 (I. T. A. No. 39 of 2005). 4. In all the three aforementioned assessment years, the assessee (appellant) claimed deduction of amount/contribution deposited by them towards PF and ESI as specified in section 43B(b) ibid. So far as the assessment year which is the subject-matter of appeal in question was concerned, the assessee claimed deduction of Rs. 7,65,571 deposited towards PF and Rs. 96,789 deposited towards ESI. The Assessing Officer was of the view that since these payments were made by the assessee subsequent to the due date as specified in the second proviso to section 43B read with the Explanation to clause (va) of section 36(1) of the Act and, hence, the assessee was not entitled to get the benefit of section 43B ibid in relation to these deposits. In other words, the deduction claimed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 date of enactment of section 43B ibid though inserted in the section at a later date then its omission by the Finance Act, 2003, too will have retrospective effect, i.e., as if it was not a part of section 43B since inception and, hence, the assessee could not have been denied the benefit of claiming deduction of payments made in question by placing reliance on the second proviso which is no longer on the statute book. Learned counsel while elaborating his submission contended that if the proviso is deemed to have been brought on the statute book retrospectively then its omission too is deemed to have been done with retrospective date and not prospectively. According to learned counsel, both, i.e., applicability of the proviso and its omission has to be with effect from the same date as in this case retrospectively. 7. In reply, learned counsel for the Revenue supported the impugned order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 removal of doubts, it is hereby declared that where a deduction in respect of any sum referred to in clause (a) or clause (b) of this section is allowed in computing the income referred to in section 28 of the previous year (being a previous year relevant to the assessment year commencing on the 1st day of April, 1983, or any earlier assessment year) in which the liability to pay such sum was incurred by the assessee, the assessee shall not be entitled to any deduction under this section in respect of such sum in computing the income of the previous year in which the sum is actually paid by him." (emphasis supplied) 10. So far as the legislative history of section 43B is concerned, the same need not to be mentioned because it is not really necessary for disposal of these appeals. In these appeals, we are primarily concerned with the second proviso to section 43B. So far as the second proviso is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt 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 Court to be retrospective in operation in Allied Motors' case [1997] 224 ITR 677 has no substance. In other words, the question, as to whether the second proviso to section 43B of the Act is retrospective in operation or prospective, did not fall for consideration before the Supreme Court in Allied Motors' case [1997] 224 ITR 677 and hence this court cannot accept the submission of learned counsel for the appellant and hold the second proviso also to be retrospective in operation. It is not the submission of learned counsel for the appellant that since the Supreme Court has construed the first proviso to be retrospective in operation and, hence, on that basis, this court should also hold the second proviso too to be retrospective in operation. Mere perusal of the first proviso would show that it has application to the cases falling in clauses (a), (c), (d), (e) and (f) of section 43B whereas the se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in Explanation appended below clause (va) of sub-section (1) of section 36 ibid for claiming the benefit under section 43B ibid. Non-compliance with the second proviso to section 43B would result in disallowance so far as these payments are concerned. 15. It is not in dispute that the appellant's (assessee's) case was governed by the second proviso to section 43B, because at the relevant time the second proviso was holding the field and was a part of section 43B of the Act. In these circumstances, it was obligatory upon the assessee to have complied with the requirement of the second proviso to section 43B ibid. Since admittedly, the assessee failed to ensure compliance by not depositing the amount before the due date and, hence, they were rightly denied the benefit of section 43B by the Assessing Officer and later by the Tribunal by restoring the order of the Assessing Officer. 16. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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