DCIT, CIR-1(1), KOLKATA, Kolkata V. M/s Garden Reach Shipbuilders & Engineers Ltd., Kolkata

ITA 355/KOL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0889 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 04-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY BHATTACHARJEE FCA LD
• Keywords: Business income
• Section: 43B; 28; 139

Judgement Text

ITA NO. 355/KOL/2016 PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA BEFORE: SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER, AND SHRI DR. ARJUN LAL SAINI, ACCOUNTA NT MEMBER I.T.A NO. 355/KOL/2016 A.Y : 2011-12 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), KOLKATA. APPELLANT VS M/S. GARDEN REACH SHIP- BUILDERS & ENGINEERS LTD. PAN AACG9371K RESPONDENT FOR THE APPELLANT : SHRI ARINDAM BHATTACHARJEE, A DDL. CIT, LD.DR FOR THE RESPONDENT : SHRI SANJAY BHATTACHARJEE, F CA, LD.AR DATE OF HEARING : 12-10-2017 DATE OF PRONOUNCEMENT : 06-12-2017 ORDER SHRI S.S.VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE IS ARISING OUT OF ORDER DATED 21-12- 2015 OF COMMISSIONER OF INCOME TAX (APPEALS), FOR SHORT CIT(A) HEREIN, 1, KOLKATA FOR THE ASSESSMENT YEAR 2011-12. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER TH E CIT-A IS CORRECT IN ALLOWING THE ASSESSEES CLAIM REGARDING DEDUCTION ON DEPOSIT OF EMPLOYEES CONTRIBUTION TO P.F (RS. 3,48 ,38,217/-) BEYOND THE DUE DATE U/S. 2(24)(X) R.W.S 36(1)(VA) OF THE A CT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE ASSESSEE IS ENGAGED IN SHIP CONSTRUCTION, REPAIRS , GENERAL ENGINEERING AND DIESEL ENGINES. ON PERUSAL OF RETUR N FILED BY THE ASSESSEE, THE AO FOUND THAT DURING THE YEAR UNDER C ONSIDERATION THE ASSESSEE DEBITED AN AMOUNT OF RS.13,26,10,231/- TOW ARDS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND (PF). ON PERUSAL OF SCHEDULE-5 OF TAR (TAX AUDIT REPORT), THE AO FOUND THAT THE ASSESSEE HAS FAILED TO DEPOSIT AN AMOUNT OF RS.3,48 ,38,217/- TOWARDS ITA NO. 355/KOL/2016 PAGE | 2 PF BEFORE THE DUE DATE OF PAYMENT AS PER PROVISION OF SECTION 36(1)(VA) OF THE ACT. THE AO PROPOSED TO DISALLOW THE SAID AMOUNT OF RS.3,48,38,217/- TOWARDS EMPLOYEES CONTRIBUTION TO PF FOR NONPAYMENT OF THE SAME WITHIN STIPULATED TIME PRESC RIBED UNDER SECTION 2(24)(X) R.W.S 36(1)(VA) OF THE ACT AND ASK ED THE ASSESSEE THAT WHY AN AMOUNT OF RS.3,48,38,217/- WOULD NOT B E DISALLOWED UNDER THE PROVISION OF SECTION 36 OF THE ACT AND AC CORDING TO AO THE ASSESSEE ALSO COULD NOT EXPLAIN THE SAME. THE AO B Y INVOKING THE PROVISIONS OF SECTION 2(24)(X) R.W.S 36(1)(VA) OF T HE ACT AND ADDED THE AMOUNT OF RS.3,48,38,217/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE CIT-A THE ASSESSEE IN SUPPORT OF ITS CONTENTION RELIED ON VARIOUS FOLLOWING CASE LAWS:- CIT VS. AIMIL LTD 321 ITR 508(DEL) CIT VS.ANZ INFORMATION TECHNOLOGY P.LTD 318 ITR 123(KAR) CIT VS. SABARI ENTERPRISES 298 ITR 141 (KAR) CIT VS. GEORGE WILLIAMSON (ASSAM) LTD 284 ITR 619(GAU) ITAT, DELHIS ORDER DT. 06-09-2012 AND VARIOUS DECI SIONS OF COURTS, HELD THAT THE CASE OF ASSESSEE IN DEPOSITING THE EMPLOY EES PROVIDENT FUND BEFORE THE DUE DATE OF FILING OF RETURN U/S.139(1) IS ADMISSIBLE. 5. THE CIT-A AFTER CONSIDERING THE SUBMISSIONS AND CASE LAWS MENTIONED HEREINABOVE DELETED THE ADDITION TO RS.3, 48,38,217/-MADE U/S. 36(1)(VA) OF THE ACT ON ACCOUNT OF EMPLOYEES CONTRIBUTION TO PF BY STATING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE OBSERVATIONS MADE BY THE AO IN THE ASSESSMENT ORDER AND SUBMISSION FILED BY THE A/R OF THE APPELLANT AND CITED CASE LAWS. IT IS OBSERVED THAT DURING THE ASSESSMEN T PROCEEDINGS, THE A.O FOUND FROM THE TAX AUDIT REPORT THAT THE ASSESSEE HAD FAI LED TO DEPOSIT AN AMOUNT OF RS.3,48,38,217/- TOWARDS PROVIDENT FUND BEFORE THE DUE DATE OF PAYMENT AS PER PROVISION OF SECTION 36(1)(VA). HENCE, THE AMOU NT WAS TREATED AS INCOME OF THE ASSESSEE U/S. 2(24)(X) OF THE I.T ACT, 1961. TH E APPELLANTS A.R HAS THROUGH THE WRITTEN SUBMISSION HAS STATED THAT THE APPELLAN T HAD IN RESPECT TO SHOW CAUSE BY THE AO INFORMED OF DEPOSITING THE EMPLOYEE S THE A.O. INFORMED OF DEPOSITING THE EMPLOYEES CONTRIBUTIONS TO PROVIDENT FUND IN RESPECT OF 3 MONTHS I.E. MAY 2010, NOVEMBER, 2010 AND JANUARY, 2 011 BEFORE THE DUE DATE OF FILING OF RETURN OF INCOME U/S 139( 1) OF THE IT ACT. IT WAS ALSO STATED THAT THE APPELLANT HAD ALSO FULFILLED THE PROVISION OF SECTI ON 36(1)(VA) FOR CREDIT THE AMOUNT OF THE EMPLOYEES WITH THEIR OWN CONTRIBUTION S. FURTHER, THE APPELLANT HAS ALSO RELIED UPON JUDGEMENTS OF VARIOUS HIGH COU RTS AND TRIBUNALS THAT IS EMPLOYEES CONTRIBUTION TO PROVIDENT FUND ARE DEPOSI TED BEFORE DUE DATE OF FILING OF RETURN OF INCOME, THAN THERE, SHOULD 110T BE ANY DISALLOWANCE U/S 36(1)(VA) OF IT ACT, 1961. FROM PERUSAL OF THE DETAILS FURNISHED IN THE AUDITO R'S REPORT, IN RESPECT OF 'EMPLOYEES' CONTRIBUTION TO PROVIDENT FUND RECEIVED AND PAID DURING THE PREVIOUS YEAR 2010-11' AND STATED THAT FOR THE MONT H OF MAY, 2010 EMPLOYEES 'CONTRIBUTION TO PF RS.13309814 AND ACTUAL DATE OF PAYMENT ON 25.06.2010, FOR I THE MONTH OF NOVEMBER, 2010 EMPLOYEES CONTRIBUTIO N RS.10670319 AND ITA NO. 355/KOL/2016 PAGE | 3 ACTUAL PAYMENT ON 22.12.2010 AND FOR THE MONTH OF JANUARY, 2011 CONTRIBUTION RS. 10858084 AND ACTUAL DATE OF PAYMENT ON 23.02.20 11. I HAVE DULY CONSIDERED THE JUDGMENT OF KARNATAKA HI GH COURT 213 CTR 269, WHEREIN IT WAS HELD THAT CONTRIBUTIONS MADE BY ASSE SSEE TO PF AND ESI ARE ALLOWABLE EVEN THOUGH MADE BEYOND STIPULATED SECTIO N 36(1)(VA), READ WITH SECTION 2(24 )(X), PROVIDED SUCH CONTRIBUTIONS ARE PAID' BY ASSESSEE ON OR BEFORE DUE DATE. IN VIEW OF THE ABOVE, THE APPELLAN T'S CONTENTIONS ARE FOUND TO BE CORRECT AS! THE DISPUTED CONTRIBUTION TO THE PF WERE PAID BEFORE DUE DATE OF FILING THE RETURN AND FACTS OF THE APPELLANT'S CASE ARE COVERED BY THE JUDGEMENT IN 213 CTR 269 (KAR). HENCE I DELETE THE ADDITION M ADE BY THE A.O, OF RS. 3,48,38,217/- U/S 36(1))(VA) OF THE IT ACT, THESE G ROUNDS ARE ALLOWED. 6. BEFORE US THE LD.DR RELIED ON THE ORDER OF THE A O IN MAKING THE IMPUGNED ADDITIONS ON ACCOUNT OF EMPLOYEES CONTRIB UTION TO P.F (RS.3,48,38,217/-) BEYOND THE DUE DATE PRESCRIBED U /S. 2(24)(X) R.W.S 36(1)(VA) OF THE ACT. HE ALSO SUBMITS THAT TH E CIT-A HAS ERRED IN ALLOWING THE SAME, ESPECIALLY IN THE LIGHT OF CB DTS SAID CLARIFICATION PARA 5 OF CIRCULAR NO. 21/2015 AND PR AYED TO ALLOW THIS GROUND OF APPEAL RAISED BY THE REVENUE. 7. ON THE OTHER HAND, THE LD.AR RELIED ON THE IMPUG NED ORDER OF THE CIT-A IN DOING SO. HE REITERATED HIS SAME SUBMI SSIONS MADE BEFORE THE CIT-A IN SUPPORT OF CLAIM OF THE ASSESSE E. HE ALSO RELIED ON THE FOLLOWING CASE LAWS:- CIT VS. STATE BANK OF BIKANER & JAIPUR (2014) 363 ITR 70 (RAJ.)- DECISION IN FAV OUR OF ASSESSEE PR. CIT VS. RAJASTHAN STATE BEVERAGE CORPRN. LTD ( 2017) 84 TAXMANN. COM 185(SC) - DECISION IN FAVOUR OF ASSE SSEE CIT VS. SABARI ENTERPRISE (2008) 298 ITR 141(KAR ) 213 CTR 263(KAR) 8. IN VIEW OF ABOVE, HE PRAYED TO DISMISS THE GROUN D OF APPEAL FILED BY THE REVENUE ON THIS ISSUE. 9. HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. WE FIND THAT THE AO DISALLOWED AN AMOUNT OF RS.3,48,38,217/- BEING EMPLOYEES CONTRIBUTION TOWA RDS PROVIDENT FUND BY INVOKING THE PROVISION OF SECTION 2(24)(X) R/W SEC 36(1)(II) OF THE ACT FOR NOT DEPOSITING THE SAME WITHIN SPECIFIE D DATE. BUT, THE CIT-A DELETED SUCH AMOUNT IN VIEW OF JUDGMENT OF HO NBLE HIGH COURT OF KARNATAKA REPORTED IN 213 CTR 269, WHEREIN IT W AS HELD THAT CONTRIBUTIONS MADE BY ASSESSEE TO PF AND ESI ARE AL LOWABLE EVEN THOUGH MADE BEYOND STIPULATED U/SEC.36(1)(VA), R/W. S 2(24)(X), ITA NO. 355/KOL/2016 PAGE | 4 PROVIDED SUCH CONTRIBUTIONS ARE PAID BY ASSESSEE ON OR BEFORE DUE DATE OF FILING OF RETURN OF INCOME. WE FIND THAT T HE 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 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. 10. 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 DEPAR TMENT TO GRANT DEDUCTION IN COMPUTING THE INCOME UNDER SECTION 28 IN THE YEAR I N WHICH TAX, DUTY, CESS, ETC., IS ACTUALLY PAID. HOWEVER, PARLIAMENT TOOK COGNIZANCE OF THE FACT THAT ACCOUNTING YEAR OF A COMPANY DID NOT ALWAYS TALLY WITH THE DUE DATES UND ER THE PROVIDENT FUND ACT, MUNICIPAL CORPORATION ACT [OCTROI] AND OTHER TAX LAWS. THEREF ORE, BY WAY OF FIRST PROVISO, AN INCENTIVE/RELAXATION WAS SOUGHT TO BE GIVEN IN RESP ECT 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 ASSESSEE(S ) THEN WOULD BE ENTITLED TO DEDUCTION. HOWEVER, THIS RELAXATION/INCENTIVE WAS RESTRICTED O NLY TO TAX, DUTY, CESS AND FEE. IT DID NOT APPLY TO CONTRIBUTIONS TO LABOUR WELFARE FUNDS. THE REASON APPEARS TO BE THAT THE EMPLOYER(S) SHOULD NOT SIT ON THE COLLECTED CONTRIB UTIONS AND DEPRIVE THE WORKMEN OF THE RIGHTFUL BENEFITS UNDER SOCIAL WELFARE LEGISLATIONS BY DELAYING PAYMENT OF CONTRIBUTIONS TO THE WELFARE FUNDS. HOWEVER, AS STATED ABOVE, THE SE COND PROVISO RESULTED IN IMPLEMENTATION PROBLEMS, WHICH HAVE BEEN MENTIONED HEREINABOVE, AND WHICH RESULTED IN THE ENACTMENT OF FINANCE ACT, 2003, DELETING THE SE COND 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 ITA NO. 355/KOL/2016 PAGE | 5 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 EXAMIN ED. IN THAT CASE, THE QUESTION WHICH AROSE FOR DETERMINATION WAS, WHETHER SALES TAX COLL ECTED BY THE ASSESSEE AND PAID AFTER THE END OF THE RELEVANT PREVIOUS YEAR BUT WITHIN TH E 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 CASE 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 ASSESSEE WH ICH WAS ON ACCOUNT OF SALES TAX COLLECTED BY THE ASSESSEE FOR THE LAST QUARTER OF T HE RELEVANT ACCOUNTING YEAR. THE 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 T HE 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 PROVISO CAME T O BE INSERTED WITH EFFECT FROM 1ST APRIL, 1988, IT WAS ENTITLED TO THE BENEFIT 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 WELFARE FUNDS OF EMPLOYEE(S) ON THE OTHER. THIS IS ONE MORE REASON WHY WE HOLD THAT THE FINANCE ACT , 2003, IS RETROSPECTIVE IN OPERATION. MOREOVER, THE JUDGEMENT IN ALLIED MOTORS (P) LIMITE D (SUPRA) IS DELIVERED BY A BENCH OF THREE LEARNED JUDGES, WHICH IS BINDING ON US. ACCOR DINGLY, WE HOLD THAT FINANCE ACT, 2003, WILL OPERATE RETROSPECTIVELY WITH EFFECT FROM 1ST A PRIL, 1988 [WHEN THE FIRST PROVISO STOOD INSERTED]. LASTLY, WE MAY POINT OUT THE HARDSHIP AN D THE INVIDIOUS DISCRIMINATION WHICH WOULD BE CAUSED TO THE ASSESSEE(S) IF THE CONTENTIO N OF THE DEPARTMENT IS TO BE ACCEPTED THAT FINANCE ACT, 2003, TO THE ABOVE EXTENT, OPERAT ED PROSPECTIVELY. TAKE AN EXAMPLE - IN THE PRESENT CASE, THE RESPONDENTS HAVE DEPOSITED TH E CONTRIBUTIONS WITH THE R.P.F.C. AFTER 31ST MARCH [END OF ACCOUNTING YEAR] BUT BEFORE FILI NG OF THE RETURNS UNDER THE INCOME TAX ACT AND THE DATE OF PAYMENT FALLS AFTER THE DUE DAT E UNDER THE EMPLOYEES' PROVIDENT FUND ACT, THEY WILL BE DENIED DEDUCTION FOR ALL TIMES. I N VIEW OF THE SECOND PROVISO, WHICH STOOD ON THE STATUTE BOOK AT THE RELEVANT TIME, EACH OF S UCH ASSESSEE(S) WOULD NOT BE ENTITLED TO DEDUCTION UNDER SECTION 43-B OF THE ACT FOR ALL TIM ES. THEY WOULD LOSE THE BENEFIT OF DEDUCTION EVEN IN THE YEAR OF ACCOUNT IN WHICH THEY PAY THE CONTRIBUTIONS TO THE WELFARE FUNDS, WHEREAS A DEFAULTER, WHO FAILS TO PAY THE CO NTRIBUTION TO THE WELFARE FUND RIGHT UPTO 1ST APRIL, 2004, AND WHO PAYS THE CONTRIBUTION AFTE R 1ST APRIL, 2004, WOULD GET THE BENEFIT OF DEDUCTION UNDER SECTION 43-B OF THE ACT. IN OUR VIEW, THEREFORE, FINANCE ACT, 2003, TO THE EXTENT INDICATED ABOVE, SHOULD BE READ AS RETRO SPECTIVE. IT WOULD, THEREFORE, OPERATE FROM 1ST APRIL, 1988, WHEN THE FIRST PROVISO WAS IN TRODUCED. IT IS TRUE THAT THE PARLIAMENT HAS EXPLICITLY STATED THAT FINANCE ACT, 2003, WILL OPERATE WITH EFFECT FROM 1ST APRIL, 2004. HOWEVER, THE MATTER BEFORE US INVOLVES THE PRINCIPL E OF CONSTRUCTION TO BE PLACED ON THE PROVISIONS OF FINANCE ACT, 2003. 11. 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.' 12. 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 ITA NO. 355/KOL/2016 PAGE | 6 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. 13. 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 IN THE I MPUGNED ORDER OF THE CIT-A AND IT WAS JUSTIFIED. THUS, THE GROUND RA ISED BY THE REVENUE IN THIS REGARD IS DISMISSED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06. 12.2017. SD/- SD/- ARJUN LAL SAINI S.S. VISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06.12. 2017 *PP/SPS / COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT THE DCIT, CIRCLE-1(1), KOLKATA,P-7, CHO WRINGHEE SQUARE, R.NO.20, 7 TH FLOOR, KOLKATA-69. 2 RESPONDENT M/S. GARDEN REACH SHIPBUILDERS & ENGINE ERS LTD, 43/46 GARDEN REACH ROAD, KOLKATA-24. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA //TRUE COPY// BY ORDER, SR.PS/H.O.O ITAT, KOLKATA