TaxTMI 
TaxTMI 
2015 (2) TMI 573
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....drawn. 3. The only effective ground in Revenue's appeal reads as under : "2. The Ld. CIT(A) has erred in deleting disallowance of deduction u/s 40(a)(ia) when the assessee, failed to deposit tax to Government account within due date on the ground that the provision in this section are amended by the Finance Act, 2010 with retrospective effect, when in fact the amendment is with effect from 01/04/2010, and not from the date of insertion of the provision i.e. 01/04/2005 as held in the case of Varadharaja Theatre (P) Ltd." 4. The brief facts relating to this ground are that in the assessment framed u/s 143(3) the AO disallowed u/s 40(a)(ia) a sum of Rs. 3,73,07,240/- even though this expenditure was made by the Assessee before the due d....
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....ded that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid after the due date specified in sub-section (1) of section 139, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. Provided further that where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B on any such sum but is not deemed to be an assessee in default under the first proviso to sub-section (1) of section 201, then, for the purpose of this sub-clause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of....
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....ent was made w.e.f. 1.4.2010, therefore, CIT(A) was not correct in allowing the relief to the Assessee. We noted the interpretation of this provision as given by the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax, Ahmedabad IV Vs. Om Prakash R Chaudhary in Tax Appeal Nos.412/2013 and connected matter, which came to be decided on 22.11.2013, after referring to the judgments of Alied Motors (P.) Ltd. Vs. CIT reported in AIR 1997 SC 1361 and CIT Vs. Alom Extrusions Limited reported in (2009) 319 ITR 306, has held as under: "15.4: Thus, considering relevant legislative changes made by the Parliament from time to time and some of the decisions relevant to consider the question of retrospectivity raised in these present....
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....tion 40(a)(ia) in the year 2005 - 06 was to augment compliance of TDS provision. TDS either not deducted or deducted but not paid in respect of payment of interest, commission or brokerage etc., before the expiry of time prescribed under sub-section (1) of Section 200 and in accordance with the other provisions of Chapter XVII, such amount shall not be deducted in computing the „income‟ chargeable under the head „Profit & Gains‟ of business or profession. Such provision starts with non obstante clause which states that notwithstanding anything contained in Section 30 to 38 of the Income-tax Act, if the tax deducted at source is not paid within prescribed time [under Section 200 (1)], no amount could be deducted while....
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....y purpose would not be sub-served, if the effect is limited to A.Y.2010-11 and subsequent years only. Strict construction if leads to a result not intended to be fulfilled by the object of legislation and another construction is possible apart from literal construction, then that construction needs to be preferred as held in a decision in case of CIT V. Alom Extrusion Limited [Supra]. 16.6: We also cannot be oblivious of submissions not denied by the other side that various representations were made to the Finance Minister to bring about suitable amendment as the assessee otherwise was losing genuine deduction of expenditure on this count as also reflected in the speech of Finance Minister so also in the memorandum explaining the provision....
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....duced by the Finance Act, 2008 of relaxing the time for deposit of TDS was made retrospective from the year 2005 [1st April 2005], the amendment by Finance Act 2010 with regard to other limb of time limit for payment of TDS has to be held retrospective not from 1st April 2010 only. If we recall at this stage the speech of Finance Minister while introducing this provision by way of Finance Act, 2010, this amendment essentially has been brought for relaxing the current provision on disallowance of expenditure. The tax, if is deducted at any time during the financial year and paid before the date of filing of the return, the Legislature intended to allow deduction on such expenditure with an intention to permit additional time for most deducto....