TaxTMI 
TaxTMI 
2016 (3) TMI 756
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....xpressly stated in the Finance Act 2010 that the amendment is with effect from 01.04.2010?" 2. We have heard Mr.Sanmathi E.I, learned counsel appearing for the appellant-Revenue. It appears that the Tribunal while considering the contention of the appellant, at paragraph-6, 7 and 8 it has observed thus: "6. We have perused the orders and heard the Ld. DR. Hon'ble jurisdictional High Court in the case of CIT v. Shri. Santhosh Kumar Shetty [(2014) 89 CCH 199] held as under at para 5 to 8 of its order: 5. The argument of the Revenue is, when the Finance Act, 2010, expressly states that the said provision would come into effect from 01.04.2010, it is not permissible for the Tribunals or the Courts to give it a retrospective effect prior ....
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.... the assessee. At this stage, therefore, the true effect of such amendment needs to be discerned. 16.1: It is demonstrated before us that the TDS provision caused unintended inexplicable situation whereby the assessee who deducted the tax at source from the payments made by it for and on behalf of the Government and then if misses out the time limit of depositing the same with the Treasury within the time prescribed, the amount spent for its business purposes on account of the late deposit of such tax would result into disallowance of entire expenditure under Section 40[a](ia). The said proviso thereby caused immense hardship. The amendment under consideration made by the Finance Act 2010 relaxes the rigors of such prevision by permitting ....
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....h 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. 1'his has been given retrospective effect from 1st April 2010. 16.5: Of course. the Legislature has given the effect from a specified date and....
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....tion 40[a](ia) of the Act is retrospective from the date of insertion of the provision i.e., 1st April 2005 therefore needs to be answered in affirmation. It can be seen that the amendment made by the Finance Act 2010 allows additional time upto the due date of filing of the return in respect of even those instances where TDS has been deducted during the first eleven months of the previous year. The additional time till the due date of filing of the return, in case of TDS made during the last month of the previous year was already available by the amendment made by Finance Act 2008. Thus, it is apparent that the relaxation made by the amendment made under the Finance Act, 2010 brings the law in parity with the aforementioned situation and a....
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.... is made correspondingly from one per cent to one and half per cent for every month or part of month for discouraging delay in deposit. As rightly contended by the respondents arithmetical discrepancy can be well judged from the face that the rates of TDS may vary between 1% to 10%, whereas, legitimate business expenditure denied is 100% - resulting into taxation of gross receipts coupled with levy of interest and penalty, which would mean that the possibility cannot be ruled out of business of the tax payer getting closed down permanently, if there is absence of any scope of claiming any expenses in the next year. 7. Similar is the view expressed by the Delhi High Court in the cases of CIT Vs. Oracle Software India Limited reported in 29....