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TMI Blog2012 (5) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the claim of late payment of PF, ESIC and ESI. The Provident Fund ESIC & ESI Contributions were to the extent of Rs.12,36,139/- which was paid by the assessee before filing of the return and proof of payment was submitted before the Assessing Officer. The Asseessing Officer had issued a show cause notice requiring to show cause as to why the amount deposited in the account of each employee after due date may not be deducted under the provision of Section 46-B read with Section 36(1) sub-section (Va) of the Income Tax Act. The assessee submitted the reply to the show cause notice. The Assessing Officer disallowed the claim holding that the payment were not made by due date. The following observations were made by Assessing Officer while r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id benefit was not available to the assessee and Commissioner of Income tax as well as the appellate tribunal erred in rejecting the case of the department. Learned counsel for the assessee, refuting the submission of learned counsel for the department, submitted that the amendments made in Section 43-B proviso w.e.f. 1st April, 2004 by Finance Act 2003 is retrospective in nature and shall cover the deposits made towards the provident fund contribution even before 1st April 2004. In support of the submission he has placed reliance on judgment of the Apex Court in the case of Commissioner of Income Tax vs Alom Extrusions Ltd. reported in (2009)319 ITR 303 (SC). We have considered the submissions of learned counsel for the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of employers/ employee contribution and employees contribution in the next month of deduction but these are delayed payment. It is also correct that all the dues have been paid by the assessee well before the due date for filing the return of income prescribed for the year under appeal. Further the learned Members of the Hon'ble ITAT in their order in ITA NO. 557/Luc/2005 for AY 2002-2003, dated 28.4.2006, in the appellants own case, have held that "It has been the consistent stand of the Tribunal, both with regard to Employer's contribution as well as Employee's contribution, that amendment made in the proviso to Section 43B w.e.f. 1.4.2004 is retrospective in nature and hence if the amounts are deposited before the date of filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making a Book entry based on Merchantile System of Accounting. At the same time, Section 43-B [main section] made it mandatory for the Department to grant deduction in computing the income under Section 28 in the year in which tax, duty, cess, etc., is actually paid. However, Parliament took cognizance of the fact that 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 first proviso, an incentive/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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act while computing the business income of the previous year? That was a case which related to Assessment Year 1984-1985. The relevant accounting period ended on June 30, 1983. The Income Tax Officer disallowed the deduction claimed 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 43-B which, as stated above, was inserted with effect from 1st April, 1984. It is also relevant to note that the first proviso which came into force with effect from 1st April, 1988 was not on the statute book when the assessments were made in the case of Allied Motors (P) Limited (supra). However, the assessee contended that even though th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y with effect from 1st April, 1988 [when the first proviso stood inserted]. Lastly, we may point out the hardship and the invidious discrimination which would be caused to the assessee(s) if the contention of the Department is to be accepted that Finance Act, 2003, to the above extent, operated prospectively. Take an example - in the present case, the respondents have deposited the contributions with the R.P.F.C. after 31st March [end of accounting year] ...12/-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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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