TaxTMI 
TaxTMI 
2016 (12) TMI 1493
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....ve effect and hence no disallowance be made u/s.40(a)(ia) of the Act, where T.D.S. has been paid before the due date of filing of R.o.l. 2) On the facts and in the circumstances of the case, the Ld. Commissioner of Income-Tax (Appeals)-XX, Ahmedabad ought to have upheld the order of the Assessing Officer. 3) It is therefore, prayed that the order of the Ld. Commissioner of Income-Tax (Appeals)-XX, Ahmedabad may be set-aside and that of the Assessing Officer be restored. 2. Briefly stated facts of the case are that the assessee is a partnership firm and it derives income from trading in Castor Seeds, Castor Oil, Guar, Juar, Rapseed seeds etc. on wholesale basis. Assessee filed its return of income on 30.12.2006 declaring total income at Rs. 10,23,540/-. Assessment was completed u/s 143(3) of the Act on 16.12.2008 for total income of Rs. 10,63,240/-. Thereafter it was noticed by the Assessing Officer from form No.26Q that tax deducted u/s 194-C of the Act was deposited after the expiry of time limit prescribed u/s 200(1) of the Act and, therefore, notice u/s 148 of the Act was issued on 20.09.2011. The assessee vide its letter dated 10.10.2011 replied that the return filed on 30.1....
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....isions of section 40(a)(ia) of the I.T. Act for the reason that the TDS made on the job work expenses were not deposited within the time as per the provisions of the section.: Hence the Job work charges were disallowed in view of the of section 40(a)(ia). The A.R. of the appellant has contended that although TDS was made correctly but the same was deposited in government account by the due date u/s 139(1) of I.T. Act. The total TDS amount was at Rs. 90.264/- Out of the same Rs,62,620/- was deposited by 31.6.06 and the balance of Rs. 28,014/- deposited on 30.05.06 i.e. in the subsequent year but before due date of filing of return of income. Further it was contended that since all TDS amounts were deposited within due date u/s 139 and hence the same are allowable in the year under consideration in view of the judgments of Hon. Kolkatta High Court in the case of CIT Vs. Virgin creations and Hon. Gujarat High Court in the case of CIT Vs. J.K. Construction company (supra). 4.4. The Hon. Gujarat High Court has dismissed the appeal of the revenue by observing as under:- . "Plainly speaking, assessee had to make deduction before 31" March of the year in question and as long as such amou....
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....elaxation made by the amendment made under the Finance Act, 2010 brings the law in parity with the aforementioned situation and accordingly, for the TDS deducted all throughout the year, time 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 deduc.tors 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 increasi....
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....il 2005. 17.3 We notice that without challenging the constitutional validity of this provision of Section 40 [a](ia) of the Act, Delhi High Court has read down a similar provision, as reported in case of Commissioner of Income-tax v. Oracle Software India Limited, reported in 293ITR 353. 17.4 We also notice that the Calcutta High Court in case of CIT v. Virgin Creations [Supra], relying on the decision in cases of Allied Motors Private Limited and Alom Extrusions Limited [Supra], held that the said provision would have retrospective application. In words of the Bench - "The learned Tribunal on fact found that the assessee had deducted tax at source from the paid charges between the period April 1, 2005 and April 28, 2006 and the same were paid by the assessee in July and August 2006, ie., well before the due date of filing of the return of income for the year under consideration. This factual position was undisputed. Moreover, the Supreme Court, as has been recorded by the learned Tribunal, in the case of Allied Motors Private Limited and also in the case of Alorn Extrusions Limited has already decided that the aforesaid provision has retrospective application. Again, in the ca....
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.... is that the Tribunal wrongly relied upon the amendment which came into effect from 1.04.2010. This is clearly erroneous in as much as Section 40 (a)(ia) was amended by the Finance Act, 2008 with effect from 01.05.2005 whereby the words "on or before the due date specified in eub-ecction (1) of Section 139" was substituted by the words, "has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-section (1) of Section 200" of the Act. We, thus, find no merit in this appeal. This Appeal is accordingly dismissed." We are broadly in agreement with the view expressed by the Delhi High Court. The issue being identical, the present Tax Appeal is also dismissed." 18. From the discussion held hereinabove, we answer the substantial question of law raised in these Appeals in favour of the assessee and against the Revenue by holding the amendment made in Section 40 (a)(ia) of the Income Tax Act, 1961 by the Finance Act 2010, as retrospective in operation, having effect from 1st April 2005 ie., from the date of insertion of Section 40 (a) (ia) of the Act. 19. Resultantly, we hold that the Tribunal rightly decided the said issue ....