TaxTMI 
TaxTMI 
TaxTMI 
2007 (7) TMI 169
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....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 Allied Motors P. Ltd. v. CIT. paragraph 60 of the said decision reads thus (page 682) "60. Several cases have come to notice where taxpayers do not discharge their statutory liability such as in respect of excise duty, employer's contribution to provident fund....
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....y 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 the aforesaid legal submissions to contend that in these cases the respondents/assessees who are the employers were/are statutorily liable to pay PF contribution to its employees under the provisions of the Provident Funds Act, the same were not paid by them within the due da....
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.... 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 of the Supreme Court reported in [2002] 257 ITR 338, General Finance Co. v. CIT (Asst.) in support of his legal contention that the word "removed" or "omitted" occurring in the statutory provision of the first proviso to section 43B of the Act are omitted by way of amendment. The "omission" ....
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....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 the date by which the assessee is required as an employer to credit contribution to the employees' account in the relevant fund under any Act, rule or order or notification issued there under or under any standing order, award, contract of service or other wise." Prior to the above clause was inserted to sec....