High Court Of Calcutta
Halmira Estate Tea (P) Ltd. vs. CIT
Sections 43B, 260A
Ajoy Nath Ray & Indira Banerjee, JJ.
IT Appeal No. 89 of 2002
4th September, 2002
ORDER
BY THE COURT :
The only question formulated by the assessee for the purpose of agitating it in an appeal under s. 260A is as follows : “Whether on a true and proper construction of the provisions of s. 43B of the IT Act, 1961, the Tribunal was justified in law in holding that provident fund payments actually made during the previous year but beyond the due date would have to be disallowed under the said provisions ?”
2. In the impugned order of the Tribunal passed on 31st Jan., 2002, it directed the assessee to place all its arguments in regard to provident fund contribution deductions before the AO so far as the question of what constitutes “due date” was concerned. The Tribunal proceeded on the basis that as per the current law, contained in s. 43B(b) and the further proviso appearing under that section, no discretion is left in regard to provident fund contributions to the AO or the other Departmental authorities of the IT Department.
3. In case the due date for payment of the provident fund contribution is gone, then and in that event, even if the contribution is made later on and even if such contribution is made to the full extent, deductions under the IT Act are no longer claimable or permissible.
4. The above provisions of the IT Act are set out below : “43B. Notwithstanding anything contained in any other provision of this Act, a deduction otherwise allowable under this Act in respect of………(b) any sum payable by the assessee as employer by way of contribution of any provident fund………… shall be allowed, …………….. only in ………… that previous year in which such sum is actually paid…………… provided further that no deduction shall in respect of any sum referred to in cl. (b), be allowed unless such sum has actually been paid……………. on or before the due date………..”
5. We have extracted above the most material portions of the sub-section and the further proviso and it is these portions with which we are concerned.
6. Mr. Bajoria appearing for the assessee submitted that the word “shall” in the further proviso makes the disallowance of deduction too rigorous and too harsh; according to him, for the provision to be intra vires and constitutional, it might have to be read down and the word “shall” construed as “may”, so as to relieve those assessees, who have been delayed beyond the due date, either only slightly or because of reasons beyond their creation or control.
7. We are of the opinion that if a constitutional question is to be raised about the vires of the further proviso, then it has to be done, in some other Court than the reference Court. We are, however, quite convinced that the further proviso either survives as a whole or not at all and there is no scope for reading it down. If the word “shall” is turned into “may”, the further proviso loses all meaning. thus, it is either good or bad in its entirety, and so far as we are concerned the proviso being still in the statute book, it is quite good for us in the reference Court.
8. Mr. Bajoria, in accordance with his usual fairness placed before us several cases, three of those being of our own Division Bench where there are positive indications of the disallowance of provident fund contribution having to be made compulsorily and mandatorily if the due date is once gone by.
9. In our opinion there is no open or debatable question in this matter justifying the admission of the appeal. The appeal petition is accordingly rejected. The order and direction of the Tribunal in regard to the due date having to be found out by the AO is consequentially confirmed by us as good in law.
The matter is so clear that any detailed reference to the cases is unnecessary. If there were any matter for debate or dispute, we would have to admit the appeal and decide the matter thereafter.
[Citation : 268 ITR 498]
