DCIT, CIR-10(2), KOLKATA, Kolkata V. M/s S & IB Services Pvt. Ltd., Kolkata

ITA 1401/KOL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0884 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 20-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KALYAN NATHADDL CIT LD
• Keywords: Business income; Depreciation
• Section: 43B; 28; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : D BE NCH, KOLKATA BEFORE : SHRI P.M. JAGTAP, ACCOUNTANT MEMBE R AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO. 1401/KOL/2015 A.Y 2012-13 DEPUTY COMMISSIONER VS. M/S. S & IB SERVICES OF INCOME-TAX, CIR-10(2), PVT. LIMITED KOLKATA PAN AALCS6434Q [APPELLANT ] [RESPONDENT ] APPELLANT BY : SHRI KALYAN NATH,ADDL.CIT, LD.S R.DR RESPONDENT BY : NONE APPEARED DATE OF HEARING : 12-09-2017 DATE OF PRONOUNCEMENT : 06-12-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DT. 04-09- 2015 OF THE CIT-A, 4, KOLKATA FOR THE A.Y 2012-13 I N ALLOWING THE RELIEF TO THE ASSESSEE ON THE ISSUE OF DEPRECIATION /PF CONTRIBUTION. 2. IT IS NOTICED THAT NEITHER THE ASSESSEE NOR ANY ONE APPEARED FOR THE ASSESSEE NOR ANY APPLICATION FILED SEEKING ADJO URNMENT. THEREFORE, WE PROCEED TO HEAR THE LD.DR FOR THE A PPELLANT AND DISPOSE OF THE APPEAL ON MERITS AND BY PERUSING TH E MATERIAL AVAILABLE ON RECORD. 3. GROUND NO.1 IS RELATING TO ALLOWANCE OF DEPRECIA TION @ 30% ON WRITTEN DOWN VALUE OF MOTOR CARS. 4. AS PER FORM 3CD, THE AO FOUND THAT THE ASSESSEE CLAIMED DEPRECIATION @ 30% ON WRITTEN DOWN VALUE OF MOTOR C AR USED FOR COMMERCIAL PURPOSES. THE ASSESSEE WAS ASKED WHY SUC H DEPRECIATION WILL NOT BE RESTRICTED TO 15% ON WDV. BEFORE THE AO THE ASSESSEE SUBMITTED THAT MOTOR BUSES, MOTOR LORRIES AND MOTOR TAXIES ARE USED IN A BUSINESS RUNNING ON HIRE AND THE ASSESSEE IS ENTITLED TO AVAIL ITA NO.1401/KOL/15 M/S. S & IB SERVICES PVT. LTD 2 SUCH DEPRECIATION @ 30% VIDE SUB-CLAUSE (II) TO THE CLAUSE (3) UNDER SCHEDULE III, PART A OF NEW APPENDIX, WHICH CAME IN TO EFFECT FROM A.Y 2006-07 W.R.T RULE 5 OF THE IT RULES, 1962. THE AO HAS NOT ACCEPTED SUCH SUBMISSION OF ASSESSEE AND DISALLOWED @ 15 I.E. AT RS.18,22,744/- AND ADDED THE SAME TO THE TOTAL INCO ME OF THE ASSESSEE. 5. BEFORE THE CIT-A THE LD.AR OF THE ASSESSEE HAS R ELIED ON FOLLOWING CASE LAWS IN SUPPORT OF THE CONTENTION:- IN THE CASE OF MAGMA FINCORP LTD VS. ACIT REPORTED IN (2010) 128 TTJ 715(KOL) OF ITAT KOLKTA. IN THE CASE OF CIT VS. BRINKS ARYA (I) P.LTD IN ITA NO. 8455/MUM/2010 OF ITAT MUMBAI IN THE CASE OF UNION OF INDIA & ORS. VS. KAMLAKSHI FINANCE CORPORATION REPORTED IN AIR 1992 SC 711 (SC) RUNNING , WHICH WAS USED 6. THE CIT-A AFTER CONSIDERING THE ABOVE CASE LAWS AND SUBMISSIONS OF ASSESSEE DIRECTED THE AO TO APPLY TH E DEPRECIATION @ 30% AS CLAIMED BY THE ASSESSEE AND TO DELETE THE AD DITION MADE IN THIS REGARD. RELEVANT PORTION OF THE CIT-A ORDER ON THIS ISSUE IS REPRODUCED HEREIN BELOW:- 5.2 I HAVE CONSIDERED THE CONTENTION OF THE AR OF THE APPELLANT IN THE MATTER IN THE BACKDROP OF THE ASSESSMENT ORDER I HAVE ALSO CONSID ERED THE JUDICIAL PRECEDENCE IN THIS REGARD. I FIND THAT THE DECISION OF THE HON'BLE MUM BAI TRIBUNAL IN CASE OF CIT VS. M/S. BRINKS ARYA INDIA PVT. LTD. [I. T.A. NO. 8455/MUM/2 010] WHEREIN THE TRIBUNAL HAS HELD THAT IF THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION OF CASH,VALUABLES BELONGING TO THE THIRD PARTIES. FOR WHICH IT USES M OTOR LORRIES CUSTOMIZED AS ARMOURED/SECURITY VANS AND FURTHER THAT THESE ARMOU RED/SECURITY VANS ARE CUSTOMIZED MOTOR LORRIES WHICH ARE USED IN THE BUSINESS OF RUN NING THEM ON HIRE FOR TRANSPORTATION OF VALUABLES, THUS DEPRECIATION THEREON IS ALLOWABL E AT HIGHER RATE TO BE APPLICABLE IN THE APPELLANT'S CASE AS WELL. THE JUDGMENT OF THE APEX COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. KAMLAKSHI FINANCE CORPORATION REPORT ED IN AIR 1992 SC 711 AS REFERRED TO BY THE AR HAS ALSO BEEN CONSIDERED. I FIND THE F INDINGS OF THE AO ON THIS POINT IN HIS ORDER TO BE NOT IN CONSONANCE WITH THE DECISION OF THE HON'BLE MUMBAI TRIBUNAL IN CASE OF CIT V M/S. BRINKS ARYA INDIA PVT. LTD. [I.T.A. N O. 8455/MUM/2010 SUPRA. THEREFORE, GOING BY THE JUDICIAL PRECEDENCE. I DO NOT FIND ANY AVENUE TO SUSTAIN THE ACTION OF THE AO IN CHARGING 15% AS DEPRECIATION ON THE VEHICLES USE D FOR THE PURPOSE AS DISCUSSED IN THE FOREGOING AS AGAINST THE CLAIM @ 30% BY THE APPELLAN T. IN VIEW OF THIS THE AO IS DIRECTED TO APPLY THE RATE OF 30% ON ACCOUNT OF DEPRECIATION ON THE VEHICLES AS DISCUSSED IN THE FOREGOING. THE ADDITION MADE ON THIS COUNT IS DELET ED. THIS GROUND IS THEREFORE ALLOWED. 7. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE AO IN ADOPTING THE RATE OF DEPRECATION @ 15% ON WDV OF MOTOR CARS. HE ALSO SUBMITS THAT THE CIT-A HAS ERRED IN ALLOWING THE SA ME @ 30% INSTEAD OF 15% AS APPLIED BY THE AO. ITA NO.1401/KOL/15 M/S. S & IB SERVICES PVT. LTD 3 8. HEARD THE LD. DR AND PERUSED THE RECORD. WE FIN D THAT THE CASE LAW RELIED ON BY THE ASSESSEE IN THE CASE OF MAGMA FINCORP LTD OF KOLKATA TRIBUNAL REPORTED IN (2010) 128 TTJ 715 (KOL), WHICH IN TURN RELIED ON A DECISION OF HONBLE JURISDICTIONAL HIGH COURT OF CALCUTTA IN THE CASE OF AGARWAL FINANCE, WHICH HELD THAT IF THE MOTOR CARS ARE USED BY THE ASSESSEE IN THE BUSINESS OF RU NNING THEM ON HIRE, THE CLAIM OF HIGHER RATE OF DEPRECIATION IS M AINTAINABLE. WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRA NSPORTATION OF CASH AND VALUABLES BELONGING TO THE THIRD PARTIES, FOR W HICH IT USES MOTOR LORRIES CUSTOMIZED AS ARMOURED VEHICLES. THE SECURI TY VANS ARE CUSTOMIZED, USED FOR TRANSPORTATION OF CASH AND VAL UABLES ON HIRE AND, THEREFORE, WE FIND THE RATIO OF THE DECISION OF CALCUTTA HIGH COURT IN THE CASE OF AGARWAL FINANCE IS APPLICABLE AND THE DEPRECIATION IS ALLOWABLE AT HIGHER RATE. THE CIT-A WAS JUSTIFIED IN DIRECTING THE AO AND IN ALLOWING @ 30 DEPRECIATION A S CLAIMED BY THE ASSESSEE. WE FIND NO INFIRMITY IN THE IMPUGNED ORDE R OF THE CIT-A AND IT IS JUSTIFIED. THUS, GROUND NO. 1 RAISED BY T HE REVENUE IS DISMISSED. 9. THE NEXT EFFECTIVE ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT- A IS JUSTIFIED IN DELETING THE IMPUGNED ADDITION OF RS.86,28,073/- MADE U/S. 2(24) R.W.S 36(1)(VA) OF THE ACT TOWARDS EMPLOYEES CONTRIBUTION TO PF IN THE FACTS AND CIRCUMSTANCES O F THE CASE. 10. THE AO FOUND THAT THE ASSESSEE COMPANY RECEIVED THE SUM OF RS.86,28,073/- FROM ITS EMPLOYEES TOWARDS EMPLOYEE S CONTRIBUTION TO PROVIDENT FUND, WHICH WAS DEPOSITED BY THE ASSES SEE AFTER THE DUE DATE OF PAYMENT CLAIMED THE SAME AS ALLOWABLE EXPE NDITURE BY RELYING ON ITS OWN ORDER DECIDED BY ITAT KOLKATA, W HEREIN IT HAS BEEN HELD THAT PF/ESI ARE ALLOWED, WHEN THE SAME WAS DEP OSITED BEFORE FURNISHING OF RETURN OF INCOME. BUT, THE AO WAS OF THE VIEW THAT SINCE ITA NO.1401/KOL/15 M/S. S & IB SERVICES PVT. LTD 4 THE ASSESSEE HAD FAILED TO DEPOSIT THE SAME WITHIN THE DUE DATES SPECIFIED U/S. 2(24) R.W.S 36(1)(VA) OF THE ACT AND BY RELYING ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CAST OF CIT-II VS. GUJARAT STATE ROAD TRANSPORT (GSRTC) ADDED THE S AME TO THE TOTAL INCOME OF THE ASSESSEE. 11. AGGRIEVED BY SUCH ORDER OF THE AO, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT-A. BEFORE HIM THE ASSESSEE HA S RELIED ON VARIOUS CASE LAWS IN SUPPORT OF ITS CLAIM. 12. THE CIT-A AFTER CONSIDERING THE SUBMISSION AND THE CASE LAWS AS RELIED ON BY THE ASSESSEE DIRECTED THE AO TO DEL ETE THE IMPUGNED ADDITION. THE CIT-A IN HIS ORDER HAS ALSO HELD THAT AMOUNTS ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUN D WERE DEPOSITED WELL BEFORE THE DATE OF FILING OF RETURN OF INCOME U/S. 139(1) OF THE ACT AND DIRECTED TO BE DELETED ON THIS ISSUE. 13. BEFORE US THE LD. DR RELIED ON THE ORDER OF THE AO IN MAKING THE IMPUGNED ADDITION ON THIS ISSUE. HE ALSO RELIED ON THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. G SRTC AND PRAYED TO ALLOW THE APPEAL OF REVENUE. 14. HEARD THE LD. DR AND PERUSED THE RECORD. WE FIN D THAT THE ISSUE IN HAND IS SQUARELY COVERED BY THE DECISIONS OF THE HONBLE SUPREME COURT AND HIGH COURT OF CALCUTTA HIGH COURT IN THE CASES OF VINAY CEMENT LTD, ALOM EXTRUSIONS LTD REPORTED IN (2009) 313 ITR (ST.1)(SC), IN (2009) 319 ITR 306(SC) RESPECTIVELY AND VIJAY SHREE LTD. WE FIND THAT THE IMPUGNED AMOUNT TOWARDS EMPLO YEES CONTRIBUTION TO PROVIDENT FUND WERE DEPOSITED WELL BEFORE THE DUE DATE OF FILING OF RETURN. WE FIND THAT THE HONBLE HIGH COURT OF CALCUTTA IN THE CASE OF VIJAY SHREE LTD SUPRA HAS UPHELD THE FINDING OF THE TRIBUNAL BASING ON SAME IDENTICAL FACTS ON T HE RATIO OF DECISION AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CA SE OF ALOM ITA NO.1401/KOL/15 M/S. S & IB SERVICES PVT. LTD 5 EXTRUSION LTD REPORTED IN 309 ITR 306(SC), WHEREI N THE HONBLE SUPREME COURT HAD AN OCCASION TO DETERMINE THE EFFE CT OF DELETION OF 2 ND PROVISO AND EFFECT OF AMENDMENT TO 1 ST PROVISO TO SECTION 43B BY FINANCE ACT 2003 FROM 01-04-2004 OR RETROSPECTIVELY I.E FROM 01-04- 1988. 15. THE HONBLE SUPREME COURT FOUND THAT THE AME NDMENT TO 1ST PROVISO TO SECTION 43B EXTENDED THE BENEFIT OF DEDU CTION OF TAX TO CONTRIBUTIONS TO EMPLOYEES PROVIDENT FUND, SUPERAN NUATION FUND AND OTHER WELFARE FUNDS ON PAR WITH DUTY, CESS AND FEE AND, WHEREBY, THE HONBLE SUPREME COURT HELD THAT BRINGING THE UNIFOR MITY TO THE CONTRIBUTIONS OF EMPLOYEES PROVIDENT FUND, SUPERAN NUATION FUND AND OTHER WELFARE FUNDS ON PAR WITH DUTY, CESS AND FEE CAME INTO FORCE WITH EFFECT FROM 01-04-2004 BY FINANCE ACT, 2003, W AS CURATIVE IN NATURE AND SHOULD BE READ AS RETROSPECTIVE AND SHAL L OPERATE FROM 01-04-1988 WHEN THE 1 ST PROVISO WAS ACTUALLY INSERTED. THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREIN BELOW: 9. WE FIND NO MERIT IN THESE CIVIL APPEALS FILED BY THE DEPARTMENT FOR THE FOLLOWING REASONS: FIRSTLY, AS STATED ABOVE, SECTION 43-B [MA IN SECTION], WHICH STOOD INSERTED BY FINANCE ACT, 1983, WITH EFFECT FROM 1ST APRIL, 1 984, EXPRESSLY COMMENCES WITH A NON- OBSTANTE CLAUSE, THE UNDERLYING OBJECT BEING TO DIS ALLOW DEDUCTIONS CLAIMED MERELY BY MAKING A BOOK ENTRY BASED ON MERCANTILE SYSTEM OF A CCOUNTING. AT THE SAME TIME, SECTION 43-B [MAIN SECTION] MADE IT MANDATORY FOR THE DEPARTMENT TO GRANT DEDUCTION IN COMPUTING THE INCOME UNDER SECTION 28 IN THE YEAR IN WHICH TAX, DUTY, CESS, ETC., IS ACTUALLY PAID. HOWEVER, PARLIAMENT TOOK CO GNIZANCE OF THE FACT THAT ACCOUNTING YEAR OF A COMPANY DID NOT ALWAYS TALLY WITH THE DUE DATES UNDER THE PROVIDENT FUND ACT, MUNICIPAL CORPORATION ACT [OCTROI] AND OTHER TAX LA WS. THEREFORE, BY WAY OF FIRST PROVISO, AN INCENTIVE/RELAXATION WAS SOUGHT TO BE GIVEN IN R ESPECT OF TAX, DUTY, CESS OR FEE BY EXPLICITLY STATING THAT IF SUCH TAX, DUTY, CESS OR FEE IS PAID BEFORE THE DATE OF FILING OF THE RETURN UNDER THE INCOME TAX ACT [DUE DATE], THE ASS ESSEE(S) THEN WOULD BE ENTITLED TO DEDUCTION. HOWEVER, THIS RELAXATION/INCENTIVE WAS R ESTRICTED ONLY TO TAX, DUTY, CESS AND FEE. IT DID NOT APPLY TO CONTRIBUTIONS TO LABOUR WE LFARE FUNDS. THE REASON APPEARS TO BE THAT THE EMPLOYER(S) SHOULD NOT SIT ON THE COLLECTE D CONTRIBUTIONS AND DEPRIVE THE WORKMEN OF THE RIGHTFUL BENEFITS UNDER SOCIAL WELFA RE LEGISLATIONS BY DELAYING PAYMENT OF CONTRIBUTIONS TO THE WELFARE FUNDS. HOWEVER, AS STA TED ABOVE, THE SECOND PROVISO RESULTED IN IMPLEMENTATION PROBLEMS, WHICH HAVE BEEN MENTION ED HEREINABOVE, AND WHICH RESULTED IN THE ENACTMENT OF FINANCE ACT, 2003, DELETING THE SECOND PROVISO AND BRINGING ABOUT UNIFORMITY IN THE FIRST PROVISO BY EQUATING TAX, DU TY, CESS AND FEE WITH CONTRIBUTIONS TO WELFARE FUNDS. ONCE THIS UNIFORMITY IS BROUGHT ABOU T IN THE FIRST PROVISO, THEN, IN OUR VIEW, THE FINANCE ACT, 2003, WHICH IS MADE APPLICABLE BY THE PARLIAMENT ONLY WITH EFFECT FROM 1ST APRIL, 2004, WOULD BECOME CURATIVE IN NATURE, H ENCE, IT WOULD APPLY RETROSPECTIVELY WITH EFFECT FROM 1ST APRIL, 1988. SECONDLY, IT MAY BE NOTED THAT, IN THE CASE OF ALLIED MOTORS (P) LIMITED VS. COMMISSIONER OF INCOME TAX, REPORTED IN [1997] 224 I.T.R.677, THE SCHEME OF SECTION 43-B OF THE ACT CAME TO BE EX AMINED. IN THAT CASE, THE QUESTION WHICH AROSE FOR DETERMINATION WAS, WHETHER SALES TA X COLLECTED BY THE ASSESSEE AND PAID AFTER THE END OF THE RELEVANT PREVIOUS YEAR BUT WIT HIN THE TIME ALLOWED UNDER THE RELEVANT SALES TAX LAW SHOULD BE DISALLOWED UNDER SECTION 43 -B OF THE ACT WHILE COMPUTING THE BUSINESS INCOME OF THE PREVIOUS YEAR? THAT WAS A CA SE WHICH RELATED TO ASSESSMENT YEAR 1984-1985. THE RELEVANT ACCOUNTING PERIOD ENDED ON JUNE 30, 1983. THE INCOME TAX OFFICER DISALLOWED THE DEDUCTION CLAIMED BY THE ASS ESSEE WHICH WAS ON ACCOUNT OF SALES TAX COLLECTED BY THE ASSESSEE FOR THE LAST QUARTER OF THE RELEVANT ACCOUNTING YEAR. THE ITA NO.1401/KOL/15 M/S. S & IB SERVICES PVT. LTD 6 DEDUCTION WAS DISALLOWED UNDER SECTION 43-B WHICH, AS STATED ABOVE, WAS INSERTED WITH EFFECT FROM 1ST APRIL, 1984. IT IS ALSO RELEVANT TO NOTE THAT THE FIRST PROVISO WHICH CAME INTO FORCE WITH EFFECT FROM 1ST APRIL, 1988 WAS NOT ON THE STATUTE BOOK WHEN THE ASSESSMENTS WERE MADE IN THE CASE OF ALLIED MOTORS (P) LIMITED (SUPRA). HOWEVER, THE ASSESSEE CONTENDED THAT EVEN THOUGH THE FIRST PROVI SO CAME TO BE INSERTED WITH EFFECT FROM 1ST APRIL, 1988, IT WAS ENTITLED TO THE BENEFI T OF THAT PROVISO BECAUSE IT OPERATED RETROSPECTIVELY FROM 1ST APRIL, 1984, WHEN SECTION 43-B STOOD INSERTED. THIS IS HOW THE QUESTION OF RETROSPECTIVITY AROSE IN ALLIED MOTORS (P) LIMITED (SUPRA). THIS COURT, IN ALLIED MOTORS (P) LIMITED (SUPRA) HELD THAT WHEN A PROVISO IS INSERTED TO REMEDY UNINTENDED CONSEQUENCES AND TO MAKE THE SECTION WORKABLE, A PR OVISO WHICH SUPPLIES AN OBVIOUS OMISSION IN THE SECTION AND WHICH PROVISO IS REQUIR ED TO BE READ INTO THE SECTION TO GIVE THE SECTION A REASONABLE INTERPRETATION, IT COULD B E READ RETROSPECTIVE IN OPERATION, PARTICULARLY TO GIVE EFFECT TO THE SECTION AS A WHO LE. ACCORDINGLY, THIS COURT, IN ALLIED MOTORS (P) LIMITED (SUPRA), HELD THAT THE FIRST PRO VISO WAS CURATIVE IN NATURE, HENCE, RETROSPECTIVE IN OPERATION WITH EFFECT FROM 1ST APR IL, 1988. IT IS IMPORTANT TO NOTE ONCE AGAIN THAT, BY FINANCE ACT, 2003, NOT ONLY THE SECO ND PROVISO IS DELETED BUT EVEN THE FIRST PROVISO IS SOUGHT TO BE AMENDED BY BRINGING ABOUT A N UNIFORMITY IN TAX, DUTY, CESS AND FEE ON THE ONE HAND VIS-A-VIS CONTRIBUTIONS TO WELF ARE FUNDS OF EMPLOYEE(S) ON THE OTHER. THIS IS ONE MORE REASON WHY WE HOLD THAT THE FINANC E ACT, 2003, IS RETROSPECTIVE IN OPERATION. MOREOVER, THE JUDGEMENT IN ALLIED MOTORS (P) LIMITED (SUPRA) IS DELIVERED BY A BENCH OF THREE LEARNED JUDGES, WHICH IS BINDING ON US. ACCORDINGLY, WE HOLD THAT FINANCE ACT, 2003, WILL OPERATE RETROSPECTIVELY WITH EFFECT FROM 1ST APRIL, 1988 [WHEN THE FIRST PROVISO STOOD INSERTED]. LASTLY, WE MAY POINT OUT T HE HARDSHIP AND THE INVIDIOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSE E(S) IF THE CONTENTION OF THE DEPARTMENT IS TO BE ACCEPTED THAT FINANCE ACT, 2003 , TO THE ABOVE EXTENT, OPERATED PROSPECTIVELY. TAKE AN EXAMPLE - IN THE PRESENT CAS E, THE RESPONDENTS HAVE DEPOSITED THE CONTRIBUTIONS WITH THE R.P.F.C. AFTER 31ST MARCH [E ND OF ACCOUNTING YEAR] BUT BEFORE FILING OF THE RETURNS UNDER THE INCOME TAX ACT AND THE DAT E OF PAYMENT FALLS AFTER THE DUE DATE UNDER THE EMPLOYEES' PROVIDENT FUND ACT, THEY WILL BE DENIED DEDUCTION FOR ALL TIMES. IN VIEW OF THE SECOND PROVISO, WHICH STOOD ON THE STAT UTE BOOK AT THE RELEVANT TIME, EACH OF SUCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDER SECTION 43-B OF THE ACT FOR ALL TIMES. THEY WOULD LOSE THE BENEFIT OF DEDUCTION EVE N IN THE YEAR OF ACCOUNT IN WHICH THEY PAY THE CONTRIBUTIONS TO THE WELFARE FUNDS, WHEREAS A DEFAULTER, WHO FAILS TO PAY THE CONTRIBUTION TO THE WELFARE FUND RIGHT UPTO 1ST APR IL, 2004, AND WHO PAYS THE CONTRIBUTION AFTER 1ST APRIL, 2004, WOULD GET THE BENEFIT OF DED UCTION UNDER SECTION 43-B OF THE ACT. IN OUR VIEW, THEREFORE, FINANCE ACT, 2003, TO THE EXTE NT INDICATED ABOVE, SHOULD BE READ AS RETROSPECTIVE. IT WOULD, THEREFORE, OPERATE FROM 1S T APRIL, 1988, WHEN THE FIRST PROVISO WAS INTRODUCED. IT IS TRUE THAT THE PARLIAMENT HAS EXPL ICITLY STATED THAT FINANCE ACT, 2003, WILL OPERATE WITH EFFECT FROM 1ST APRIL, 2004. HOWEVER, THE MATTER BEFORE US INVOLVES THE PRINCIPLE OF CONSTRUCTION TO BE PLACED ON THE PROVI SIONS OF FINANCE ACT, 2003. 16. APPLYING THE PRINCIPLE AS LAID DOWN BY THE HO NBLE SUPREME COURT IN THE AFOREMENTIONED CASE AS FOLLOWED BY THE HONBLE HIGH COURT OF CALCUTTA TO THE PRESENT CASE, WE MAY USEF ULLY READ THE 1 ST PROVISO AS AMENDED BY FINANCE ACT 2003 AS UNDER: 'PROVIDED THAT NOTHING CONTAINED IN THIS SECTION SH ALL APPLY IN RELATION TO ANY SUM WHICH IS ACTUALLY PAID BY THE ASSESSEE ON OR BEFORE THE DUE DATE APPLICABLE IN HIS CASE FOR FURNISHING THE RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 IN RESPECT OF THE PREVIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH SU M WAS INCURRED AS AFORESAID AND THE EVIDENCE OF SUCH PAYMENT IS FURNISHED BY THE ASSESS EE ALONG WITH SUCH RETURN.' 17. A PLAIN READING OF THE AFOREMENTIONED PROVISO E XPLAINS THAT THE DEDUCTION IS AVAILABLE THAT IF THE EMPLOYER DEPOSIT S THE CONTRIBUTIONS COLLECTED FROM ITS EMPLOYEES TO ANY FUND CREATED FO R THE WELFARE OF THE EMPLOYEES BEYOND DUE DATE OF PAYMENT IN TERMS O F THE AMENDMENT TO 1 ST PROVISO TO SECTION 43B OF THE ACT AND WITHIN THE DUE DATE OF FILING RETURN OF INCOME. ITA NO.1401/KOL/15 M/S. S & IB SERVICES PVT. LTD 7 18. IN THE PRESENT CASE, THE CIT-A FOUND SATISFIE D WITH THE SUBMISSIONS OF THE ASSESSEE THAT THE IMPUGNED AMOU NTS WERE PAID BEFORE FILING RETURN OF INCOME. THEREFORE, RESPECTF ULLY FOLLOWING THE DECISION OF THE HONBLE HIGH COURT OF CALCUTTA IN T HE CASE OF VIJAY SHREE LTD SUPRA, WE HOLD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION AS PER 1 ST PROVISO TO SECTION 43B OF THE ACT AND THE ORDER OF THE CIT-A IS JUSTIFIED AND NEEDS NO INTERFERENCE . THEREFORE, THE EMPLOYEES CONTRIBUTION TO PF CAN BE PAID BEFORE TH E DUE DATE OF FILING OF RETURN OF INCOME. WE FIND NO INFIRMITY I N THE IMPUGNED ORDER OF THE CIT-A AND IT WAS JUSTIFIED. THUS, THE GROUND RAISED BY THE REVENUE IN THIS REGARD IS DISMISSED. 19. IN THE RESULT, THE APPEAL FILED BY THE REVE NUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06-12-2017 SD/- SD/- P.M JAGTAP S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :06-12-2017 PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . APPLICANT/DEPARTMENT : THE DCIT, CIR-10(2), KOLKATA P-7 CHOWRINGHEE SQUARE, 3 RD FLOOR, KOLKATA-69. 2 RESPONDENT/ASSESSEE: M/S.S & IB SERVICES PVT. LIMIT ED 1, ADYANATH SAHA ROAD, LAKE TOWN, KOLKATA-20. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER SR.P.S, HEAD OF OFFICE ITAT KOLKATA