TaxTMI 
TaxTMI 
2011 (4) TMI 498
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....sp; 2. In this case, assessment was completed u/s 143(3) of the Act on 31.10.2007 determining the loss at Rs.35,18,41,220/- as against the returned loss of Rs.39,17,29,353/-, as per revised return. During the course of assessment proceedings, it was noticed by the AO that assessee had deducted TDS out of the contract payments but same was not paid to the government account within the specified date. The details of such TDS, due date and date of payment are as under:- S. No. Amount (Rs.) As per Annexure 11 Due Date Paid On 1. 5,09,532/- 07/04/2005 12/05/2005 2. 3,61,372/- 07/04/2005 04/06/2005 3. 6,635/- 07/04/2005 27/06/2005 3. On the basis of the total amount of TDS of Rs.8,77,539/- and taking into account rate ....
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....was subsequently paid on or before the due date specified u/s 139(1) of the Act, then such expenditure shall not be disallowed u/s 40(a)(ia) of the Act. It was thus submitted by the learned counsel for the assessee that in the light of the retrospective amendment effective from 1.4.2005, the expenditure of Rs.3,98,88,136/- was not at all fit to be disallowed inasmuch as the tax deducted thereupon has ultimately been paid on 12.5.2005, 4.6.2005 and 27.6.2005 much before the due date of filing the return of income applicable to the assessee's case. The assessee further pointed out that due date specified u/s 139(1) of the Act for filing the return of income by the assessee was 31.10.2005 and the TDS which was deducted in the month of March, 2....
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....held that there is presumption that explanation given is bona fide unless proved to be otherwise"." 7. After considering the facts of the case, assessee's submission and AO's order, the learned CIT(A) deleted the penalty by observing and holding as under:- "I have carefully considered the facts of the case, based on the submission of the AR and evidences placed on record. On careful consideration, I find force in the argument put forth, by the AR, during the course of the proceedings before me and am of the view that the amended section 40(a)(ia) of the Act, provides that if the tax is deductible and was so deducted during the last month of the previous year, and was paid on or before the due date specified u/s 139(1) of the....
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.... month of the previous year, on or before the due date specified in sub-section (1) of Section 139; or in any other case, on or before the last day of the previous year. In the present case, the due date for depositing the tax was 7.4.2005 which goes to show that the tax was deducted in the month of March, 2005. If the tax was deductible and was so deducted during March, 2005, the deduction of expenses shall not be disallowed if the tax so deducted is paid on or before the due date specified in sub-section (1) of Section 139 of the Act. This amendment by the Finance Act, 2008 has been made effective retrospectively from 1.4.2005. When this assessment was made on 31.10.2007, the amendment brought by the Finance Act, 2008 with retrospective e....