These appeals are by assessee and they relate to assessment years 1977-78 to 1979-80. For assessment year 1977-78, assessee filed n additional ground of appeal before Commissioner (Appeals) that bonus payable for assessment year 1974-75 should have been allowed in assessment year 1977-78 as same was payable in September 1976. same amount was claimed for assessment year 1978-79 as actual payment was made during that year. But claim was rejected by ITO for assessment year 1978-79 on ground that assessee was following mercantile system of accounting and last date for payment of bonus, after extension allowed by Labour Commissioner, which was September 1976, was not relevant to assessment year 1978-79. bonus was payable for year 1974-75 relevant to assessment year 1976-77 as assessee closed its books on 31st of October. It had applied to Labour Commissioner for extension of time under section 36 of Payment of Bonus Act, 1965. It was claimed that until Labour Commissioner decided matter and issued necessary orders, liability would not arise. Time was allowed till 30-9-1976 and, according to assessee, liability arose in assessment year 1977- 78. Commissioner (Appeals) held that cases cited by assessee, viz., Nonsuch Tea Estate Ltd. v. CIT [1975] 98 ITR 189 (SC) and CIT v. West Chusick Coal Co. Ltd. [1981] 129 ITR 62 (Cal.), were not relevant. Section 36 did not remit any liability. It only empowered Government to extend some concession in matter of payment of bonus to any establishment in public interest. It was more in nature of executive redress and cannot be said to postpone accrual of liability. He, accordingly, held that liability for payment of bonus arose for accounting year 1974-75, i.e., assessment year 1976-77 and, thus, ITO was right in rejecting claim of assessee to deduct said payment as allowable expenditure in year 1977-78. appeal for 1978-79 was also dismissed for same reason. Similar claim to deduct bonus of Rs. 1,30,320 for assessment year 1979-80, relating to accounting period 1976-77, but paid in accounting year 1977-78, was also rejected for same reasons. assessee is in appeal. 2. arguments advanced before authorities below were repeated before us. Reliance was placed on section 36. learned departmental representative relied on section 19 of said Act. Section 36 is as follows: "Power of exemption.-If appropriate Government, having regard to financial position and other relevant circumstances of any establishment or class of establishments, is of opinion that it will not be in public interest to apply all or any of provisions of this Act thereto, it may, by notification in Official Gazette, exempt for such period as may be specified therein and subject to such conditions as it may think fit to impose such establishment or class of establishments from all or any of provisions of this Act." It is, thus, clear that in section 36 is power given to Government to exempt certain categories from operation of this Act. Thus, it would appear that Government can exempt establishment or class of establishments, from one or any of provisions of this Act on ground that it will not be in public interest to apply provisions of this Act to said concern/concerns. Therefore, unless Government passes order under section 36, making it clear that in public interest, concern is being exempted from provisions of payment of Bonus Act, said concern cannot claim that liability to pay bonus did not arise at all. order under section 36 is to be passed having regard to public interest. Unless necessary conditions are fulfilled Government also will not pass order under section 36. It is obvious that provisions of section 36 do not refer to postponement of liability to pay bonus but total exemption from provisions of payment of Bonus Act for specified period. This is quite different from postponing payment of bonus which has actually accrued. provisions regarding postponement of bonus due and payable will have to be sought elsewhere. 3. Section 19 is relevant section. It reads as follows: "Time limit for payment of bonus.-All amounts payable to employee by way of bonus under this Act shall be paid in cash by his employer- (a) where there is dispute regarding payment of bonus pending before any authority under section 22, within month from date on which award becomes enforceable or settlement comes into operation, in respect of such dispute; (b) in any other case, within period of eight months from close of accounting year: Provided that appropriate Government or such authority as appropriate Government may specify in this behalf may, upon application made to it by employer and for sufficient reasons, by order, extend said period of eight months to such further period or periods as it thinks fit, so however, that total period so extended shall not in any case exceed two years." It is, thus, clear that order is passed under section 19 and not under section 36. As rightly argued by learned departmental representative, postponement of payment does not mean that liability itself did not accrue on said date. bonus became due and payable in accounting year 1974-75. It accrued in that year but payment was postponed to accounting year 1976-77 by virtue of section 19. We, therefore, agree with decision of authorities below that liability did not accrue in accounting years relevant to assessment years 1977-78 and 1978-79. assessee's appeals for these two years are dismissed. By same logic, appeal for assessment year 1979-80 is also dismissed. 4. In result, all appeals are dismissed. *** NANDI HASBI TEXTILE MILLS LTD. v. FIRST INCOME TAX OFFICER