Section 43B inapplicable to electricity duty collected by a licensee acting only as a statutory collecting agent.

Electricity duty collected by a licensee from consumers under the Bengal Electricity Duty Act, 1935 was treated as a duty primarily payable by the consumer, with the licensee acting only as a collecting agent for the State. Because the licensee was not the primary statutory debtor and the collection was made in a fiduciary or agency capacity, the amount did not take the character of the assessee's own tax, duty, cess or fee liability. On that basis, Section 43B of the Income-tax Act, 1961 was held inapplicable to such collections, and the assessee's appeals succeeded.

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Issues: Whether electricity duty collected by a licensee from consumers under the Bengal Electricity Duty Act, 1935 is a sum payable by the assessee by way of tax, duty, cess or fee so as to attract Section 43B of the Income-tax Act, 1961.

Analysis: The statutory scheme placed the primary liability for electricity duty on the consumer, while the licensee was required to collect and pay the duty to the State Government. The proviso to Section 5(1) exempted the licensee where dues could not be recovered, showing that the licensee was not the primary debtor for the duty. The collection was treated as an agency function in a principal-agent or fiduciary capacity, not as payment by the assessee in the capacity of a person primarily liable to tax, duty, cess or fee. On that footing, the amount collected did not assume the character of the assessee's trading receipt or income, and the mischief addressed by Section 43B was not attracted.

Conclusion: Section 43B of the Income-tax Act, 1961 does not apply to electricity duty collected by the licensee-assessee under the Bengal Electricity Duty Act, 1935.

Final Conclusion: The assessee's appeals succeeded and the orders below were set aside.

Ratio Decidendi: Section 43B applies only to sums payable by the assessee as its own statutory liability, not to amounts collected and passed on by it in a fiduciary or agency capacity for the State.

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