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Issues: Interpretation of section 43B of the Income-tax Act, 1961 regarding deductions for contributions made by the assessee towards provident fund.
Analysis: The judgment was delivered by MRS. K. K. USHA J. and involved a reference at the instance of the assessee arising from the order of the Income-tax Appellate Tribunal, Cochin Bench. The relevant assessment year was 1985-86, and two questions were referred for the court's opinion. The first question revolved around the entitlement of the assessee to deductions under section 43B of the Income-tax Act, 1961, for contributions made towards provident fund. The second question pertained to the interpretation of the term 'due date' in the context of the relevant assessment year. The Assessing Officer disallowed various payments made by the assessee towards employees' voluntary contribution, employees' contribution, employers' contribution, and administrative charges under section 43B of the Act. The Commissioner of Income-tax (Appeals) initially allowed the deduction, stating the payment was made on the due date. However, the Tribunal disagreed, holding that only certain contributions fell under section 43B(b) and that the assessee was not entitled to the deduction for employers' contribution. The court analyzed section 43B, emphasizing that deductions under clause (b) could only be allowed in the year the sum was actually paid, not the year it was due. Despite the employers' contribution being due for the period ending March 31, 1985, and paid on April 15, 1985, the assessee could not claim the deduction as per the provisions of section 43B. Regarding the second question, the court noted that the second proviso to section 43B was not available during the relevant period, making it unnecessary to consider it or the Explanation below clause (va) of sub-section (1) of section 36. Consequently, the court answered the first question in the affirmative against the assessee and in favor of the Revenue, declining to answer the second question. In conclusion, the court's judgment clarified the application of section 43B concerning deductions for contributions made towards provident fund, emphasizing the importance of the actual payment year over the due year. The decision highlighted the specific provisions of the Act and their implications on the assessee's entitlement to deductions, ultimately ruling in favor of the Revenue on the first question posed.
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