9911796707
TMI Blog1996 (4) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... e observed the mercantile system of accounting and claimed deduction on account of sales tax in the sum of Rs. 43,134, krishi tax in the sum of Rs. 2,953, entry-tax in the sum of Rs. 103 and nirashrit tax in the sum of Rs. 643 : thus, a total sum of Rs. 46,833. Out of the above claimed deductions, a sum of Rs. 40,453 related to the last quarter of sales tax which had fallen due for payment on Diwali, 1984, but was payable within 30 days from the close of the accounting year. However, the Income-tax Officer on an interpretation of section 43B of the Act, held that the assessee was not entitled to deduction of the entire amount of Rs. 46,833, since it had not actually been paid within the accounting year. The assessee preferred an appeal to the Commissioner of Income-tax (Appeals) who confirmed the addition of Rs. 46,833 as made by the Income-tax Officer. On second appeal being filed to the Tribunal, the Tribunal held that the assessee had paid Rs. 40,453 on November 21, 1984, relating to the last instalment of sales tax which had fallen due in the accounting period and was payable within 30 days from the end of the said period. The Tribunal, therefore, deleted Rs. 40,453 from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncurring of the liability in the previous year, Explanation 2 was inserted by the Finance Act, 1989, with retrospective effect from 1st April, 1984, the date on which section 43B had been inserted, to clarify that any sum payable within the meaning of clause (a) of section 43B would mean a sum for which the assessee incurred liability in the previous year, even though such sum might not have been payable within that year under the relevant law. The purpose was obviously to make provision for cases where the relevant law permitted time for deposit of the amount beyond the previous year in respect of the liability incurred during the accounting year of the assessee. The question before us is whether in relation to the assessment year 1985-86, the previous year ending Diwali, 1984, the present assessee was entitled to claim deduction in respect of sales tax fallen due in the accounting year, but which was payable and actually paid after the close of the accounting year. Learned counsel appearing for the Revenue has brought to our notice several decisions of the various courts expressing divergent opinion on the subject. Learned counsel submits that the Delhi High Court on the interp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing these two decisions, the Supreme Court has already granted special leave to appeal, learned counsel for the assessee stresses on the decision of the Patna High Court in Jamshedpur Motors Accessories [1991] 189 ITR 70, on the ground that cleavage of opinion is in favour of the said decision. Learned counsel for the assessee has further urged that it was only with a view to mitigate the hardship occasioned by section 43B of the Act, that the proviso was added as, otherwise, even the liability incurred on the last date of the accounting year which it was impossible to discharge within the accounting year, came outside the purview of deduction in the accounting year in question. The Explanation later added as Explanation 2 with effect from the date section 43B had been inserted further confirms the intention of the Legislature that the provision was meant to apply retrospectively and cover proceedings pertaining to the previous years as well. In Jamshedpur Motor Accessories v. Union of India [1991] 189 ITR 70, the hon'ble Patna High Court considered whether the proviso to section 43B inserted by the Finance Act, 1987, with effect from April 1, 1988, will apply to the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the provision of section 43B did not admit of any ambiguity to require aid from any external source for ascertaining its purpose. The said section 43B was clearly prohibitory in nature and couched in mandatory terms. The said provision starts with a non obstante clause thus giving it overriding effect. On a plain reading of the language, it is clear that deduction was not to be allowed in the previous year, unless the amount had actually been paid in that year itself. Harshness of the provision is no ground for diluting its rigour as the taxing statutes are bound to be harsh one way or the other. Since the intention was obvious from the plain reading of section 43B and deduction of the amount of liability prescribed in the said section was to be allowed only if the actual payment had been made during the previous year itself, we find that the provision as it stood did not permit the extended meaning to cover cases where payment was made before the due date for filing a return of income but after the expiry of the accounting year merely because subsequently a proviso was added by the Finance Act, 1987, with effect from April 1, 1988. The fact that the proviso was to take effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speaks the later intention of the makers. (d) Where the section is doubtful, a proviso may be used as a guide to its interpretation ; but when it is clear, a proviso cannot imply the existence of words of which there is no trace in the section. (e) The proviso is subordinate to the main section. (f) A proviso does not enlarge an enactment except for compelling reasons. (g) Sometimes an unnecessary proviso is inserted by way of abundant caution. (h) A construction placed upon a proviso which brings it into general harmony with the terms of section should prevail. (i) When a proviso is repugnant to the enacting part, the proviso will not prevail over the absolute terms of a later Act directed to be read as supplemental to the earlier one. (j) A proviso may sometimes contain a substantive provision.' The author Justice G. P. Singh (former Chief Justice of the Madhya Pradesh High Court), in his book on Principles of Statutory Interpretation, 5th edn., 1992, at page 132, in describing the nature of a proviso, says that the proper function of a proviso is to except and to deal with the case which would otherwise fall within the general language of the main enactment. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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