TaxTMI 
TaxTMI 
2015 (2) TMI 573
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..../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 date of filing of the return for the impugned assessment year. The AO did not accept the contention of the Assessee that the amendment made u/s 40(a)(ia) of the Income Tax Act by the Finance Act, 2010 is curative in nature and applies retrospectively to the impugned assessment year. The Assessee went in appeal before the CIT(A) alongwith other grounds. The Assessee had taken the ground challenging the disallowance made u/s 40(a)(ia). CIT(A) disposed off the appeal vide order dt. 20.11.2012 but CIT(A) did not consider ground nos. 3 & 4 in respect of disallowance made u/s 40(a)(ia). The Assessee, therefore, moved an application for rectification which was accepted by the CIT(A) and accordingly, the CIT(A) on merit vide order dt. 14.2.2014 decided the issue in favour of the Assessee deleting the disallowance made u/s 40(a)(ia). 5. We hear....
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....Act, 2008, w.r.e.f. 01.04.2005, read as under: "Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted:- (A) during the last month of the previous year but paid after the said due date; or (B) during any other month of the previous year but paid after the end of the said previous year, Such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid." 5.1 The ld. DR vehemently contended that since the amendment 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 d....
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....tation of business income‟. 16.3: Thereafter, by way of amendment of Finance Act, 2008, further amendment was made whereby TDS deductible and deducted in the last month of previous year if was not paid till the due date of filing of return under sub-section (1) of Section 139 and in any other case, on or before the last day of the previous year, Section 40(a)(ia) provided for the disallowance of expenses like interest, commission, brokerage, etc. 16.4: Since, this had created anomaly, whereby tax deducted in the last month was permitted payment till filing of return as per sub-section (1) of Section 139 whereas for the TDS deducted during the rest of the months, period was provided only till 31st March of the previous year, Finance Act, 2010 was brought. To bring parity, to remedy unintended consequences and to make the provision workable, it proposed to amend the said provision and provided inter alia that no disallowance would be made if after deduction of tax during the previous year, the same has been paid on or before the due date of filing of return of income as specified in sub-section (1) of Section 139. This has been given retrospective effect from 1st April 20....
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....e is extended from payment till the filing of return. It is thus apparent that when the amendment introduced 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 deductors upto September of the next financial year. 17.1: We draw further support from the fact that the rigor of payment of interest is also enhanced by increasing the interest charged on tax deducted, if any deposit by the specified date i.e., up to the filing of the return is not made, from 12% to 18% per annum in the provision of Section 201 (1....