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TMI Blog2007 (7) TMI 169X X X X Extracts X X X X X X X X Extracts X X X X ..... before the due date for furnishing the return of income as per section 139(1) of the Act? 2 Whether the Tribunal was correct in holding that the amendment to section 43B of the Act which had been introduced by the Finance Act, 2003, with effect from April 1, 2004, should be read retrospectively and should be understood as if section 43B would not be applicable to the assessee in the light of the judgment of the apex court in Allied Motors P Ltd v CIT [1997] 224 ITR 677 " 2.We have extracted the substantial questions of law only in one appeal, viz., I. 1. A. No. 1088/2006 since other appeals are connected. 3.Learned counsel Sri M. V. Seshachala appearing for the appellants has 3 called in question the orders passed by the Appellate Tribunal by placing reliance upon the man provision of section 36(1) (va) read with section 2(24) (x), and section 43B (b) of the Income-tax Act, he has con tended that the contributions should have been made within the specified date by the assessee to avail of the relief of deduction from gross income. In support of his contention he has also placed reliance upon the decision of the apex court reported in [1997] 224 TTR 677 in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he filing of the income-tax return, these assessees were unwittingly prevented from claiming a legitimate deduction in respect of the tax paid by them. This was not intended by section 43B. Hence, the first proviso was inserted in section 43B. The amendment which was made by the Finance Act of 1987 in section 43B by inserting, inter alia, the first proviso, was remedial in nature, designed to eliminate unintended consequences which may cause undue hardship to the assessee and which made the provision unworkable or unjust in a specific situation." 5.In the light of the above decision he submitted that the employer's contribution payable by the assessee towards PF or superannuation fund or gratuity fund or any other fund for the welfare of the employees, though they are liable for deduction under section 36(1)(va) read with section 2(24) (x) of the Act, the same can be claimed deduction by the asses see only if the contribution is paid within the due date for claiming exemption under the aforesaid provisions of the Act. He has also placed reliance upon various Division Bench judgments of different High Courts, viz., Calcutta, Madras, Kerala and Rajasthan High Courts in support of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the object and intendment of insertion of section 43B, by way of amendment to the act by the Finance Act with effect from April 1, 1984, stipulates notwithstanding anything contained in the provisions of the Income-tax Act a deduction is allowable in respect of any sum payable by the assessee as an enployer by way of contribution towards PF or other funds referred to under clause (b) of section 43B of the Act. He submitted that section 43B was inserted to the Act to curb the practice of non-payment of undisputed statutory liabilities by the assessees for the welfare of employees. Further, S has contended, reliance placed by learned counsel for the Revenue t the decisions of various High Courts were all rendered prior to amendment of section 43B before deletion of the second proviso to the cove provision by the Finance Act, 2003, with effect from April 1, 2004. He also placed strong reliance upon the deletion of clauses of alphabetical tiers referred to in the first proviso to the above provision such as clause or (c) or (d) or (e) or (f). Learned counsel Sri Parthasarathy, appearing t the respondents in some of the appeals, has also placed reliance upon her decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his employees as contributions to any provident fund or superannuation fund or any fund set up under the provisions of the Employees' State Insurance Act, 1948 (34 of 1948), or any other fund for the welfare of such employees." "36.(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28—. (va) any sum received by the assessee from any of his employees to which the provisions sub-clause (x) of clause (24) of section 2 apply, if such sum is credited by the assessee to the employee's account in the relevant fund or funds on or before the due date. Explanation. Fur the purposes of this clause, 'due date' means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise." 13.This clause is inserted by the Finance Act with effect from April 1, 1988. The Explanation to this clause is read very carefully. "Due date" has been explained stating that: means th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n has come into force, with effect from April 1, 2004. The reliance placed upon the decision of the apex court in Allied Motors P. Ltd. v. CIT [ 1997]224 ITR 677 and also on the decision in General Finance Co. v. CIT (Asst.) [2002] 257 ITR 338 (SC) in respect of applicability of section 43B(b) and also omission of clause (a) or (c) or (d) or (e) or (f) referred to above occurred in the first proviso to section 43B, supports the case of the assessees and also relevant paragraphs extracted from Allied Motor's case [1997] 224 ITR 677 and paragraph 59 referred to supra in this judgment from the Finance Bill with all fours supports the case of the assessee/ respondents. Therefore, we have to answer the substantial question of law No. 1 framed by this court in these appeals at the instance of the Revenue against them, viz., in the negative. Accordingly, we answer the substantial question No. 1 framed in these appeals in the negative. 15 As regards the second question framed in I. T. A. No. 560/2006, learned counsel Sri M. V. Seshachala, fairly submitted that the same is answered by this court in the case of CIT v. Bharat Earth Movers Ltd. reported in [ 2004]268 ITR 232 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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