2002 (9) TMI 9 - HC - Income Tax

Whether, on a true and proper construction of the provisions of section 43B, the Tribunal was justified in law in holding that the provident fund payments actually made during the previous year but beyond the due date would have to be disallowed under the said provisions? - In our opinion, there is no open or debatable question in this matter justifying the admission of the appeal. The appeal petition is accordingly rejected. The order and direction of the Tribunal in regard to the due date having to be found out by the Assessing Officer is consequentially confirmed by us as good in law.

Summary

Issues: Interpretation of section 43B of the Income-tax Act regarding provident fund payments.

Analysis:
The main issue in this case revolves around the interpretation of section 43B of the Income-tax Act concerning the disallowance of deductions for provident fund payments made after the due date. The assessee questioned whether the Tribunal was correct in holding that provident fund payments made beyond the due date should be disallowed under the said provisions. The Tribunal's order directed the assessee to present arguments on what constitutes the "due date" for provident fund contributions before the Assessing Officer. The Tribunal emphasized that as per the current law, no discretion is left regarding provident fund contributions, and if the due date for payment has passed, deductions under the Income-tax Act are no longer claimable or permissible.

The crux of the matter lies in the provisions of section 43B, which state that deductions for provident fund contributions are allowable only in the previous year in which the sum is actually paid, and no deduction shall be allowed unless the sum has been paid on or before the due date. The assessee argued that the word "shall" in the provision makes the disallowance too harsh, suggesting it should be read as "may" to provide relief to delayed assessees. However, the court opined that if a constitutional question were to be raised, it should be done in a different court, and there is no scope for reading down the provision. The court affirmed that the provision must be taken as it is, without alteration.

The court considered past cases presented by the assessee but found them unnecessary to delve into, as the matter at hand was clear-cut. The court concluded that there was no debatable question warranting the admission of the appeal, and thus rejected the appeal petition. The court confirmed the Tribunal's direction regarding the due date determination by the Assessing Officer as legally sound. The judgment underscores the strict application of the law concerning provident fund contributions and the significance of adhering to due dates for claiming deductions under the Income-tax Act.