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2017 (8) TMI 1354
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....at the assessee was entitled for the payment of Rs. 1,01,50,000/- made to the sub contractors without deducting TDS according to Section 40(a)(ia) r/w 194C?" 3. Counsel for the appellant has taken us to the order passed by the A.O. and contended that the A.O. while considering the mater in detail observed as under:- S. No. Name Gross Amount TDS Profit Net amount payable Opening balance as on 01.04.06 Net amount paid upto 08.02.2007 Amount after 28.02.2009 Total amount paid including opening balance Closing Balance 1. Poonam Gupta & Sons. 1047590 10685 31428 1005477 -45750 104250 850000 954250 51227 2. Pushpendra 1340570 13673 40217 1286680 -331120 518550 400000 918550 368130 3. Rajesh Sharma 1298640 13246 38959 1246435 -32057 1217943 0 1217943 28492 4. Ramesh Bagri 896960 9149 26909 860902 53302 250000 400000 650000 210902 5. Deva Gurjar 1370550 13980 41117 1315453 12785 120000 0 1200000 115453 6. Ashok Singhal 1267310 12927 38019 1216364 -36748 ....
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....as deductible and was so deducted during the last month on the previous year, on or before the due date specified in sub section (1) of section 139; or (B) in any other case, or of before the last day of the previous year:" "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." 3.4 From the language of section 40(a)(ia), it is clear that only where the tax was deductible during the last month and was actually deducted during the last month of previous year, allowance has to be made if the amount is deposited before the due date of filing of return. In the case of appellant, the sum was deducted during the last month but it was notj deductible in that month. The sum was deductible in earlier months of the years. The appellant however actually deducted the amount only during the las....
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.... The amendment has been made in Section 40a(ia) which says that expenditure is not to be disallowed if the tax at source has been paid on or before due date specified in Section 139(1) of the Act. The proviso has also been inserted to say that expenditure will not be allowable in case TDS has been deposited after the due date of return provided in Section 139(1) of the Act. If the amendment is curative or where it is intended to remedy unintended consequence or to render the statuary provisions workable , the amendment is to be construed to relate back to the provisions in respect of which it applies to the remedy. In the following cases, amendments have been held as retrospective though such retrospective was not mentioned by this legislature while introducing such provisions. 1. Allied Motors (P) Ltd. Vs. CIT, 139 CTR 364 (SC) The amendment by Finance Act, 1987 in respect of the insertion of first proviso to Section 43B was held as curative in nature and the same was given retrospective effect from the date of inception of Section 43A. 2. CIT Vs. Alom Extrusions Ltd. , 319 ITR 306 (SC) The amendment by Finance Act , 2003 for bringing about unif....
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....nfirming the addition of Rs. 1,01,50,000. 7. Counsel for the appellant has relied upon the decision of High Court of Delhi in the case of Commissioner of Income Tax Vs. Naresh Kumar reported in (2014) 326 ITR 0256 (Delhi) wherein it has been held as under:- 28. It is, in this context, that we had in Rajinder Kumar's case (supra) observed as under: "22. Now, we refer to the amendments which have been made by the Finance Act, 2010 and the effect thereof. We have already quoted the decision of the Calcutta High Court in Virgin Creations (supra). The said decision refers to the earlier decision of the Supreme Court in the case of Allied Motors (P) Limited (supra) and Commissioner of Income Tax versus Alom Extrusions Limited, (2009) 319 ITR 306 (SC). In the case of Allied Motors (P) Limited (supra), the Supreme Court was examining the first proviso to Section 43B and whether it was retrospective. Section 43B was inserted in the Act with effect from 1st April 1984 for curbing claims of taxpayers who did not discharge or pay statutory liabilities but claimed deductions on the ground that the statutory liability had accrued. Section 43Bstates that the stat....
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.... Section 43-B is retrospective and sales tax for the last quarter paid before the filing of the return for the assessment year is deductible. This decision deals with Assessment Year 1985-85. The Calcutta High Court in the case of CIT v. Sri Jagannath Steel Corpn. has taken a similar view holding that the statutory liability for sales tax actually discharged after the expiry of the accounting year in compliance with the relevant statute is entitled to deduction under Section 43-B. The High Court has held the amendment to be clarificatory and, therefore, retrospective. The Gujarat High court in the above case held the amendment to be curative and explanatory and hence retrospective. The Patna High court has also held the amendment inserting the first proviso to be explanatory in the case of Jamshedpur Motor Accessories Stores v. Union of India. The special leave petition from this decision of the Patna High Court was dismissed. The view of the Delhi High Court, therefore, that the first proviso to Section 43-B will be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of Statutory Interpretation, 4th Edn. At p. 291: "It is well se....
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....provision. The issue was accordingly decided holding that in such cases the amendments were retrospective though it was noticed that as per Transfer of Property Act, Registration Act, etc. a legal owner must have a registered document. 25. In view of the aforesaid discussion in paras 18,19 and 20, it is apparent that the respondent assesse did not violate the unamended section 40(a)(ia) of the act. We have noted the ambiguity and referred their contention of Revenue and rejected the interpretation placed by them. The amended provisions are clear and free from any ambiguity and doubt. They will help curtail litigation. The amended provision clearly support view taken in paragraphs 17- 20 that the expression "said due date" used in clause A of proviso to unamended section refers to time specified in Section 139(1) of the Act. The amended section 40(a)(ia) expands and further liberalises the statue when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date of filing of the return, will constitute sufficient compliance." 29. In view of the aforesaid discussion, we do not find any merit in the present appeals fi....
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....the help of permissible tools of interpretation of statute. 17. The core issue as to whether the amendment made by the Finance Act 2010 to Section 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 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 ....
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....evious year which were eligible to pay TDS so deducted to the Government by due date of filing of the return under Section 139(1) of the Act. However, the assesses who may have deducted the tax in earlier months beginning from April to the end of February of the previous year, did not get such benefit of extended time and thus the same worked unreasonably for such assesses, and therefore, it can be safely held upholding the contention of the respondents that to cure such defect, amendment in the year 2010 has been brought and the benefit of extended time to avoid hardship was given to the assessee and therefore, amendment of 2010 is in continuation to the amendment of 2008, and therefore, curative in nature and the same has to be held retrospective i.e., with effect from 1st April 2005." 9. Counsel for the appellant has also relied on the decision of High Court of Karnataka in the case of Commissioner of Income Tax Vs. Santosh Kumar Shetty reported in (2014) 89 CCH 0199 KarHC wherein it has been held as under:- "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 permis....
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....s provided under sub-section (1) of Section 139 of the Act. 16.2: One can notice that the object of brining about provision of Section 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 30to 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 computing the income, under Chapter IV of the 'computation 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 subs....
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....he help of permissible tools of interpretation of statute. 17: The core issue as to whether the amendment made by the Finance Act 2010 to Section 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 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 a....