TaxTMI 
TaxTMI 
TaxTMI 
2013 (2) TMI 372
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.... date for filing of return) was not retrospectively applicable to assessment year 2009-10 as the amendment made by Finance Act, 2010 to section 40(a)(ia) was not remedial and curative in nature. ii) The learned CIT(A) and Addl. CIT ought to have appreciated that the delayed payment of TDS was for 35 days in the sum of Rs.8,12,427/- and for such an act of short delay a disallowance ofRs.7,18,96,190/- cannot be envisaged by law resulting in a tax demand of Rs.3,17,73,390/-. iii) The learned CIT(A) and Addl. CIT ought to have appreciated that principles of natural justice required that a provision like s.40(a)(ia) which imposes unconscionable and unforeseen burden in a given situation should be strictly ....
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....section did not apply to the payments made to them; the deduction of tax at source was however made out of abundant caution; mere deduction did not render it "deductible". vii) Less than Rs.20,000/- or Rs.50,000/- the appellant placed before the CIT(A) a list of payments trip-wise where the amount involved was less than the limit prescribed in sec.194C of the I T Act, and this was not accepted by the learned CIT(A). viii) S.40(a) of Income tax is not applicable to s.30 to 38 of the I T Act. The learned CIT(A) and Addl. CIT erred in holding that the provisions of section 40(a)(ia) applied to section 28 of the I T Act although the section 40(a)(ia) referred only to section 30 to 38 of I T Act. 3. The b....
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....ed by invoking the provisions of section 40(a)(ia) of the Act. The assessee's authorized representative vide his letter dated 5/9/2011, submitted that the TDS has been remitted before the due date specified in section 139(1) of the Act and relied on the following orders of the Tribunal :- * Vinay Kumar Shetty v DCIT in ITA No.879/Bang/08-09 assessment year 2005-06; * Sri Bapusahed Navasahed Dhumal v ACIT (2010) 40 SOT 361 (Mum) & * Bansal Parivahan (P) Ltd. v ITO (2011) 9 ITR (Trib) 565 (Mum). It was submitted that the provisions of section 40(a)(ia) as amended by Finance Act, 2010 has to be treated as retrospective with effect from 1st April, 2005, the date on which section 40(a)....
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....ssee being aggrieved carried the matter in appeal before the first appellate authority. 5. Before the first appellate authority, the first argument that was taken was the amendment to section 40(a)(ia) by Finance Act, 2010 has retrospective effect from 1/4/2005 and the said amendment is clarificatory in nature. Secondly it was argued that the assessee hired vehicles from persons in an unorganized sector like small scale truck owners and take full control of the vehicles for transportation of goods with attendant responsibilities for damages etc. and hence, such an arrangement does not constitute sub-contract for carrying on work. The third argument that was taken before the first appellate authority was that the TDS provisions was not appl....
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....y been paid before the year ending. 10. We have heard the rival submissions and perused the materials on record. The Special Bench of the Tribunal in the case of Merilyn Shipping and Transports v Additional CIT 16 ITR (Trib) 1 (Visakhapatnam) (SB) has held that the word "payable" used in section 40(a)(ia) of the Act is applicable only to expenditure which is payable as on March 31 of every year and cannot be invoked to disallow the amounts which have already been paid during the previous year, without deducting tax at source. The reasoning of the Tribunal in holding the above view are as follows:- i) The provision of section 40(a)(ia) of the Act clearly uses the term 'payable' and not 'paid'. Hence, if the literal const....
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....ot be extended for taxing the amounts already paid. No further legal fiction from elsewhere in the statute can be borrowed to extend the field of section 40(a)(ia) of the Act. This fiction cannot be extended any further and, therefore, cannot be invoked by Assessing Officer to disallow genuine and reasonable amounts of expenditure already paid. v) It is a cardinal principle of interpretation that the words of a statute must be prima facie given their ordinary meaning, when the words of the statute are clear, plain and unambiguous. The word 'payable' used in section 40(a)(ia) of the Act is to be assigned strict interpretation, in view of the object of the legislation, which is intended from the replacement of the words in....