The main legal point established in the judgment is that the employees' contribution towards provident fund, although deducted by the employer, must be actually paid by the employer to be eligible for deduction under Section 43B of the Income Tax Act.

B.P. Katakey, J.

1. This appeal under Section 260A of the Income Tax Act, 1961, is preferred by the assessee against the order dated July 31, 2000, passed by the learned Income Tax Appellate Tribunal, Guwahati Bench, Guwahati, in I. T. A. No. 432 (Gau) of 1997 and Cross Objection No. 12 (Gau) of 1998, relating to the assessment year 1991-92, vacating the order of the Commissioner of Income Tax (Appeals) and allowing the appeal preferred by the Revenue in so far as it relates to the decision of the Commissioner of Income Tax (Appeals) deleting an amount of Rs. 3,41,911 being the employees' contribution towards provident fund, from the income of the assessee, deduction of which was disallowed by the assessing authority under Section 43B(b) of the Income Tax Act, 1961 (in short "the Act").

2 The appeal was admitted vide order dated April 30, 2001, on the following substantial questions of law:

1. Whether Section 43B of the Act empowers the assessing authority to make addition to the income of the assessee of the amount representing the employees' contribution to the provident fund, which although credited to the employees account but not deposited during the relevant accounting year and also having not been claimed as a deduction in the profit and loss account of the relevant assessment year ?

2. Whether the Income Tax Appellate Tribunal has not exceeded its jurisdiction in going into the issue not arising out of the order of the Commissioner of Income Tax (Appeals) and which were not the subject matter of appeal before the Tribunal ?

3. Whether in view of the specific grounds of appeal taken by the appellant before the Tribunal and no prayer for amendment of the grounds of appeal having been made before the Tribunal, the Tribunal has not exceeded its power and jurisdiction in deciding on a different issue altogether which was not the subject-matter of appeal before the Income Tax Appellate Tribunal ?

3 We have heard Dr. A.K. Saraf, learned senior counsel for the appellant/assessee and Mr. U. Bhuyan, learned standing counsel appearing on behalf of the Revenue.

4 Dr. Saraf, learned senior counsel, appearing on behalf of the assessee, referring to the provision of Section 43B of the Act has submitted that as the assessee did not claim any deduction in the profit and loss account of the relevant assessment year in respect of the employees' contribution towards provident fund, which was collected by the assessee being the employer but was not deposited during the relevant year, the said amount cannot be added to the income of the assessee by the assessing authority under Section 43B of the Act, in the assessment year of 1991-92 and therefore the order of the assessing authority in adding the said amount in the income of the assessee as well as the order passed by the learned Tribunal allowing the appeal preferred by the Revenue against the order of the Commissioner of Income Tax (Appeals) dated May 1, 1997, passed in Appeal No. Guwa-116/94-95 filed by the assessee, deleting the said amount from the income of the assessee, is liable to be set aside being contrary to the provision of Section 43B of the Act. Dr. Saraf, learned senior counsel has submitted that in any case the Revenue in the appeal preferred before the learned Tribunal having not taken the ground challenging the deletion of the said amount by the Commissioner of Income Tax (Appeals) from the income of the assessee, the learned Tribunal has exceeded its jurisdiction in interfering with the decision of the learned Commissioner of Income Tax (Appeals) in that regard as under Section 254 of the Act the learned Tribunal has to confine itself to the grounds urged in the appeal. The learned senior counsel in support of his contention has placed reliance on a Division Bench decision of this court in Assam Co-operative Apex Bank Ltd. v. CIT reported in and a Division Bench decision of the Calcutta High Court in ITO v. R. L. Rajghoria reported in [1979] 119 ITR 872 (Cal).

5. Mr. B