TaxTMI 
TaxTMI 
2015 (5) TMI 987
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....t in exercise of his jurisdiction under Section 154 of the Act. According to the Ld. representative, proceeding under Section 154 of the Act could be initiated only for the purpose of rectifying error which is apparent on the face of the record. According to the Ld. representative, the issue arises for consideration is a debatable one, therefore, it is not subject to rectification under Section 154 of the Act. According to the Ld. representative, disallowance under Section 14A needs to be examined in detail in regular course of assessment. Therefore, disallowing the claim of the assessee in a proceeding under Section 154 of the Act is not justified. 4. On the contrary, Shri N. Madhavan, the Ld. Departmental Representative, submitted that Section 154 enables the Assessing Officer to rectify an error apparent on the face of the record. In that process, the Assessing Officer has amended the order passed under the provisions of Income-tax Act. According to the Ld. D.R., in this case, what was rectified is only an arithmetical error which crept in the order. The Ld. D.R. submitted that on the basis of material already available on record, the Assessing Officer rectified the arithmeti....
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....tante clause which says that notwithstanding anything to the contrary in Sections 30 to 38, the amounts shall not be deducted in computing the income chargeable to tax under the head "Profits and gains of business or profession". According to the Ld. representative, Sections 30 to 38 do not refer the payment of hire charges on machine. According to the Ld. representative, the payment of hire charges on machine would fall under Section 28 of the Act, therefore, the payment of hire charges on machine does not fall under Section 40 of the Act. Therefore, according to the Ld. representative, the disallowance made under Section 40(a)(ia) of the Act is totally contrary to the provisions of Section 40(a)(ia) of the Act. 10. On the contrary, Shri N. Madhavan, the Ld. Departmental Representative submitted that Gujarat High Court and Caulcutta High Court specifically held that the decision of Special Bench of this Tribunal in Merilyn Shipping and Transport v. ACIT (2012) 16 ITR (Trib.) 1 (SB) is not a good law. The Allahabad High Court had no occasion to consider the correctness of the decision of the Special Bench. However, it made only a passing reference. Therefore, the judgment of All....
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....o.63 & 64/Coch/2014 had an occasion to consider an identical issue. The Cochin Bench has observed as follows:- "12. We have also carefully gone through the judgment of the Allahabad High Court in CIT vs M/s Vector Shipping Services (P) Ltd (supra), copy of which is filed by the assessee. The Allahabad High Court, after reproducing the relevant paragraph from the order of CIT(A) and referring to the decision of the Special Bench of this Tribunal in Merilyin Shipping & Transports (supra) found that the Tribunal has not committed an error. It is obvious that there is no discussion about the correctness or otherwise of the decision rendered by the Special Bench of this Tribunal in Merilyn Shipping & Transports (supra). However, we find that the Gujarat High Court in the case of CIT vs Sikandarkhan N Tunvar ITA Nos 905 of 2012, 709 & 710 of 2012, 333 of 2013, 832 of 2012, 857 of 2012, 894 of 2012, 928 of 2012, 12 of 2013, 51 of 2013, 58 of 2013 and 218 of 2013 judgment dated 02-05-2013 considered the decision of the Special Bench of this Tribunal in Merilyn Shipping & Transports (supra) and specifically disagreed with the principles laid down by the Special of this Tribunal in ....
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....in the case of CIT Vs. Kelvinator reported in 2010(2) SCC 723. But the same comparison between the draft and the enacted law is not permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the legislature. The Learned Tribunal fell into an error in not realizing this aspect of the matter. The Learned Tribunal held "that where language is clear the intention of the legislature is to be gathered from the language used". Having held so, it was not open to seek to interpret the section on the basis of any comparison between the draft and the section actually enacted nor was it open to speculate as to the effect of the so-called representations made by the professional bodies. The Learned Tribunal held that "Section 40(a)(ia) of the Act creates a legal fiction by virtue of which even the genuine and admissible expenses claimed by an assessee under the head "income from business and profession": if the assessee does not deduct TDS on such expenses are disallowed". Having held so was it open to the Tribunal to seek to justify that "this....
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....nk that it is possible, particularly, in this case. The law of supplying the casus omissus by the courts is extremely clear and settled that though this Court may supply the casus omissus, it would be in the rarest of the rate case and thus supplying of this casus omissus would be extremely necessary due to the inadvertent omission on the part of the legislature. But, that is certainly not the case here. We shall now endeavour to show that no other interpretation is possible. The key words used in Section 40(a)(ia), according to us, are "on which tax is deductible at source under Chapter XVII-B". If the question is "which expenses are sought to be disallowed?" The answer is bound to be "those expenses on which tax is deductible at source under Chapter XVII-B. Once this is realized nothing turns on the basis of the fact that the legislature used the word 'payable' and not 'paid or credited'. Unless any amount is payable, it can neither be paid nor credited. If n amount has neither been paid nor credited, there can be no occasion for claiming any deduction. The language used in the draft was unclear and susceptible to giving more than one meaning. By lookin....
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....anding of the language used by the legislature should waver on the premise that as propounded by the Tribunal, this was a case of conscious omission on the part of the Parliament. Both these aspects we would address one after another. If one looks closely to the provision, in question, adverse consequences of not being able to claim deduction on certain payments irrespective of the provisions contained in Sections 30 to 38 of the Act would flow if the following requirements are satisfied:- (a) There is interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to resident or amounts payable to a contractor or sub-contractor being resident for carrying out any work. (b) These amounts are such on which tax is deductible at source under XVIII-B. (c) Such tax has not been deducted or after deduction has not been paid on or before due date specified in sub Section (1) of Section 39. For the purpose of current discussion reference to the proviso is not necessary. 24. What this Sub-Section, therefore, requires is that there should be an amount payable in the nature described above, which is su....
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....ecognizes the concept of ascertaining the profit and loss from the business or profession with reference to a certain period i.e. the accounting year. In this context, last date of such accounting period would assume considerable significance. However, this decision nowhere indicates that the events which take place during the accounting period should be ignored and the ascertainment of fulfilling a certain condition provided under the statute must be judged with reference to last date of the accounting period. Particularly, in the context of requirements f Section 40(a)(ia) of the Act, we see no warrant in the said decision of the Supreme Court to apply the test of payability only as on 31st March of the year under consideration. Merely because, accounts are closed on that date and the computation of profit and loss is to be judged with reference to such date, does not mean that whether an amount is payable or not must be ascertained on the strength of the position emerging on 31t March. 25. This brings us to the second aspect of this discussion, namely, whether this is a case of conscious omission and therefore, the legislature must be seen to have deliberately brought a....
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.... to the above order of the Cochin Bench of this Tribunal. In fact, the assessee before the Cochin Bench filed a Miscellaneous Petition on the ground that there is an error in the order of this Tribunal. The Cochin Bench rejected the Miscellaneous Petition filed by the assessee. The assessee challenged the correctness of the order passed by the Cochin Bench on the Miscellaneous Petition by way of Writ Petition before the Kerala High Court. The Kerala High Court, however, dismissed the Writ Petition filed by the assessee. In those circumstances, this Tribunal is of the considered opinion that the judgments of Calcutta High Court and Gujarat High Court have to be preferred rather than the judgment of Allahabad High Court. In other words, the judgment of Allahabad High Court does not contain any reasoning, therefore, it has to be treated as per incuriam. By respectfully following the judgments of Calcutta High Court in Crescent Export Syndicates (supra) and Gujarat High Court in Sikandarkhan N. Tunvar (supra) for the reasons stated therein, we uphold the order of the CIT(Appeals). 13. Now coming to the alternative contention of the assessee, admittedly, the assessee claims that it i....