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TMI Blog2001 (11) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... section 43B. However, the Assessing Officer held the provisions of Section 43B were not attracted and the deductions were disallowable under section 36(1)(va). Consequently, the aforesaid amounts were disallowed by Assessing Officer. On appeal, the CIT(A) confirmed the disallowance on merit but a partial relief was given in respect of the payments which were made within the grace period. Accordingly, the disallowance in respect of employee provident fund was reduced to Rs.1,48,916. Still aggrieved, the assessee is in appeal before the Tribunal. 3. The learned counsel for the assessee Mr. Gupta has vehemently argued that the provisions of section 43B are non obstante provisions and, therefore, the provisions of Section 36(1)(va) must yield to the provisions of Section 43B. Proceeding further, it was submitted by him that Section 43B can be applied only to the amounts which remained outstanding at the close of the year and does not apply to the amounts which are paid during the year even though payments made beyond the prescribed limit. Strong reliance was placed on the decision of the Tribunal Madras Bench in the case of Madras Radiators and Pressings Ltd. v. Dy. CIT[1996] 59 ITD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed by the relevant enactment, the CIT(A) was justified in confirming the order of Assessing Officer on this issue. 5. Rival contentions of the parties have been considered carefully. It would be useful to refer the relevant provisions of Section 43B and Section 36(1)(va) which are being reproduced as under: "Section 43B Certain deductions to be only on actual payment: Notwithstanding anything contained in any other provisions of this Act, a deduction otherwise allowable under this Act in respect of-- (a) ................ (b) any sum payable by the assessee as an employer by way of contribution to any provident fund or superannuation fund or gratuity fund or any other fund for the welfare of employees, or (c) to (e) ...................... Shall be allowed (respective of the previous year in which the liability to pay such sum was incurred by the assessee according to the method of accounting regularly employed by him) only in computing the income referred to in section 28 of that previous year in which such sum is actually paid by him: Provided that ...................... Provided further that no deduction shall, in respect of any sum referred to in clause (b), b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility of payment of excise duty, employer's contribution to provident fund etc. for long periods of time to claim deductions in that regard from their income on the ground that liability to pay these amounts had been incurred by them in the relevant previous year. It was to stop this mischief, Section 43B was inserted ........" The above background has been narrated to point out that Section 43B was made applicable only to those amounts which remained outstanding at the close of the accounting year. This is also apparent from the use of words 'any sum payable' in all the clauses (a) to (e). That means Section 43B cannot be applied to any sum which has been actually paid during the accounting period. 6. The provisions of Section 43B are non obstante provisions and, therefore, have overriding effect over other provisions of the Act. The opening sentence includes the words "otherwise allowable". That means Section 43B applies only to those deductions in respect of the items mentioned in clauses (a) to (e) which remained outstanding at the close of the year and are allowable under other provisions of the Act. Therefore, this section cannot be applied to a situation where a particul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the payment is made by the employer assessee within the specified period. Consequently, no deduction can be allowed where such payment are made after the specified period even though such dates fall during the period under consideration. Admittedly, the sum of Rs.1,48,916 relating to Employees provident fund contribution was after the specified period prescribed in Section 36(1)(va) and, therefore, such amounts were rightly disallowed under section 36(1)(va). 9. In view of the above discussion, the provisions of Section 43B cannot be applied to the present case in as much as (i) the employees contribution is outside the scope of clause (b) of Section 43B; (ii) delayed payment of such contribution is itself disallowable under section 36(1)(va) and consequently, it cannot be said that such deduction is otherwise allowable under the other provisions; (iii) the provisions of section 43B is applicable only to the amounts outstanding at the close of the year. Even assuming for the sake of argument that employees contribution is covered by Section 43B, the same cannot be allowed as deduction because the second proviso in clear terms provided that no such deduction shall be allowed unl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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