TMI Blog2009 (12) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... tive in nature, hence, it is retro- spective and it would operate with effect from April 1, 1988 (when the first proviso came to be inserted). - ITA No. 36 of 2007 - - - Dated:- 16-12-2009 - DEEPAK GUPTA, AHUJA V. K. JJ JUDGMENT Deepak Gupta J.- This appeal was admitted on the following substan- tial questions of law : "1. Whether the learned Tribunal was correct in law in upholding the disallowance made on account of payments made qua the con- tribution to employees' provident fund after the due date prescribed under the said Act but before the due date of filing of the return of income ? 2. Whether in the facts and circumstances of the case the learned Tribunal is justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was made before the due date fixed for filing of the return of income and necessary evidence of such payment was enclosed with the return of income then such payment was deductible. Sh. Vishal Mohan contends that to bring the payments made under clause (b) of section 43B in consonance with the other payments covered by the said section, the second proviso was deleted and as per the terms of the first pro- viso since the amount was paid before the date fixed for filing of return, the amount should be permitted to be deducted. 5. On behalf of the assessee, it is urged that the deletion of the second proviso is curative in nature and must be given retrospective effect. How- ever, according to the Revenue, the omission of the second prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which tax, duty, cess, etc., is actually paid. However, Parliament took cognisance of the fact that the accounting year of a company did not always tally with the due dates under the Provident Fund Act, Municipal Corporation Act (octroi) and other tax laws. Therefore, by way of the first proviso, an incen- tive/relaxation was sought to be given in respect of tax, duty, cess or fee by explicitly stating that if such tax, duty, cess or fee is paid before the date of filing of the return under the Income-tax Act (due date), the assessee(s) then would be entitled to deduction. However, this relaxation/incentive was restricted only to tax, duty, cess and fee. It did not apply to contributions to labour welfare funds. The reason appears to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med by the assessee which was on account of sales tax collected by the assessee for the last quarter of the relevant accounting year. The deduction was disallowed under section 43B which, as stated above, was inserted with effect from April 1, 1984. It is also relevant to note that the first proviso which came into force with effect from April 1, 1988, was not on the statute book when the assessments were made in the case of Allied Motors P. Ltd. [1997] 224 ITR 677. However, the assessee contended that even though the first proviso came to be inserted with effect from April 1, 1988, it was entitled to the benefit of that proviso because it operated retrospectively from April 1, 1984, when section 43B stood inserted. This is how the question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Department is to be accepted that the Finance Act, 2003, to the above extent, operated prospectively. Take an example-in the present case, the respondents have depo- sited the contributions with the R. P. F. C. after March, 31 (end of the accounting year) but before filing of the returns under the Income- tax Act and the date of payment falls after the due date under the Employees' Provident Fund Act, they will be denied deduction for all times. In view of the second proviso, which stood on the statute book at the relevant time, each of such assessee(s) would not be entitled to deduction under section 43B of the Act for all times. They would lose the benefit of deduction even in the year of account in which they pay the contributions t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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