TaxTMI 
TaxTMI 
2018 (11) TMI 1428
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.... impugned order. On our direction, the ld DR has also verified the fact from the record and has accepted the fact that the order sent to the address given in Form No. 35, was returned back unserved. However, non-receipt of the said order is attributable to the assessee and therefore the assessee cannot take a plea that there was no service of order. He has submitted that there was a deemed service of the order when it was sent on 16/6/2017 at the address given in Form No. 35. He has objected to the maintainability of the appeal being barred by limitation. 3. Having considered the rival submissions as well as the relevant material on record we note that in response to the letter for issuing a certified copy of the impugned order, the Administrative Officer in the office of ld. CIT(A) has informed the assessee vide letter dated 08th May, 2018 that earlier the order was sent through speed post dated 16/6/2017, however, the same was received back unserved. The said order was sent at the address given in the Form No. 35. We find that the address in the Form No. 35 was given by the assessee of his authorized representative, however, subsequently there is a change of the authorized repre....
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....wance has been made by the Assessing Officer as the assessee could not furnish complete details in respect of the expenses, it was also noted that in some cases the vouchers were self made. In view of the same 20% of the expenditure was disallowed. However, the same is found to be on the higher side and disallowance at 10% on this expenditure is upheld. The ground of appeal is partly allowed." Thus, there is no denial of the fact that the assessee has failed to produce complete details and evidence to substantiate the claim of expenditure as some of the vouchers were self made. Having regard to the facts and circumstances, when the assessee has not substantiated the claim with supporting evidence, we find that the disallowances restricted by the ld. CIT(A) to 10% is just and proper and does not require any interference. Accordingly we reject the ground No. 1 of the assessee's appeal. 7. Ground No. 2 of the appeal is regarding the disallowance of Rs. 40,000/- on account of travelling expenses. 8. We have heard the ld AR as well as the ld DR and considered the relevant material on record. The Assessing Officer has made ad hoc disallowance of Rs. 40,000/- on account of travelling ....
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....d the same is added to the total income of the assessee." As it is apparent from the order of the Assessing Officer, the Assessing Officer has not conducted any proper enquiry or has given a finding that the claim of the assessee is excessive or bogus. Accordingly, in the facts and circumstances of the case, we delete the ad hoc disallowance of Rs. 40,000/- made by the Assessing Officer. 11. Ground No. 3 of the appeal is regarding the disallowance made U/s 40(a)(ia) of the Act in respect of the interest paid to various Non-banking Financial Companies (NBFCs). The Assessing Officer has disallowed an amount of Rs. 11,90,195/- paid to NBFCs on the loan borrowed by the assessee for want of deduction of TDS. 12. The assessee challenged the action of the Assessing Officer before the ld. CIT(A). The ld. CIT(A) has accepted the fact that the amount of Rs. 20,000/- paid to Rashi Perepharals Pvt. Ltd. is subjected to TDS and therefore, the disallowance made by the Assessing Officer in respect of the said payment was deleted. As regards the payment to the other NBFCs, the ld. CIT(A) has confirmed the disallowances made by the Assessing Officer by rejecting the contention of the assessee t....
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....on 40(a)(ia) is remedial in nature and therefore, the said amendment will have retrospective effect. We find that Hon'ble Delhi High Court in case of CIT vs. Naresh Kumar (supra) while dealing with an identical issue has held in para 15 to 29 as under:- "15. Question whether the amendment is retrospective or prospective is vexed and rigid rule can be applied universally. Various rules of interpretation have developed in order to determine whether or not, an amendment is retrospective or prospective. Fiscal statutes imposing liabilities are governed by normal presumption that they are not retrospective. The cardinal rule is that the law to be applied, is that which is in force on the first day of the assessment year, unless otherwise mandated expressly or provided by necessary implication. The aforesaid dictum is based upon the principle that a new provision creating a liability or an obligation, affecting or taking away vested rights or attaching new disability is presumed to be prospective. However, it is accepted that Legislatures have plenary power to make retrospective amendments, subject to Constitutional restrictions. 16. Based upon the aforesaid broad dictum, Judges an....
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.... as regards matters of procedure, unless that effect cannot be avoided without doing violence to the language of the enactment. If the enactment is expressed in language which is fairly capable of either interpretation, it ought to be construed as prospective only." 19. The word "fairly" used in the aforesaid quotation is important and relevant, but for application of another rule of interpretation. G.P. Singh in "Principles of Statutory Interpretation", 13th Edition, 2012 at page 538 under the sub-heading "Recent statements of the rule against Retrospectivity" has greatly emphasized the principle of fairness and observed that classification of statute either substantive or procedural does not necessarily determine whether the enactment or amendment has retrospective operation, e.g., law of limitation is procedural but its application to past cause of action may result of reviving or extinguishing a right, and such operation cannot be said to be procedural. Similarly, when requisites of an action under the new statute, draws from a time incident to its passing, rule against retrospectivity may not be applicable. 20. In the said text, reference has been made to formulation by ....
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....dismissal. 23. Principle of "fairness" has not left us untouched and was applied by the Supreme Court in Vijay v. State of Maharashtra [2006] 6 SCC 289 in the following words:- "...The negotiation is not a rigid rule and varies with the intention and purport of the legislation, but to apply it in such a case is a doctrine of fairness. When a new law is enacted for the benefit of the community as a whole, even in absence of a provision the statute may be held to be retrospective in nature." 24. In Allied Motors (P.) Ltd. v. CIT [1997] (224) ITR 677/91 Taxman 205 (SC) it was held that the new proviso to Section 43B should be given retrospective effect from the inception on the ground that the proviso was added to remedy unintended consequences and supply an obvious omission. The proviso ensured reasonable interpretation and retrospective effect would serve the object behind the enactment. 25. In State through C.B.I Delhi v. Gian Singh AIR 1999 SC 3450 extreme penalty of death was diluted to alternative option of imprisonment for life recording that the legislative benevolence could be extended to an accused, who awaits judicial verdicts against his sentence. Earlier in Ra....
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.... (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 43B states that the statutory liability would be allowed as a deduction or as an expense in the year in which the payment was made and would not be allowed, even in cases of mercantile system of accountancy, in the year of accrual. It was noticed that in some cases hardship would be caused to assessees, who paid the statutory dues within the prescribed period though the payments so made would not fall within the relevant previous year. Accordingly, a proviso was added by Finance Act, 1987 applicable with effect from 1st April, 1988. The proviso stipulated that when statutory dues covered by Section 43B were paid on or before the due date for furnishing of the return under Section 139(1), the deduction/expense, equal to the amount paid would be allowed. The Supreme Court noticed the purpose behind the proviso and the remedial nature of the in....
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....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-settled that if a statute is curative or merely declaratory of the previous law retrospective operation is generally intended." In fact the amendment would not serve its object in such a situation unless it is construed as retrospective. The view, therefore, taken by the Delhi High Court cannot be sustained." 23. Section 43B deals with statutory dues and stipulates that the year in which the payment is made the same would be allowed as a deduction even if the assessee is following the mercantile system of accountancy. The proviso, however, stipulates that deduction would be allowed where the statutory dues covered by Section 43B stand paid on or before the due date of filing of return of income. Section 40(a)(ia) is applicable to cases where an assessee is required to deduct tax at source and fails to deduct or does not make payment ....
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....t 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 filed by the Revenue and they are dismissed." We further note that the Coordinate Bench of this Tribunal in case of Rajesh Yadav in ITA No. 895/JP/2012 vide order dated 29.01.2016 has held as under:- "6.1. Recently in the matter of P.M.S. Diesels 2015 ] 59 taxmann.com 100 (Punjab & Haryana), Hon'ble Punjab & Haryana High Court had elaborately discussed the judgment passed by the Hon'ble Calcutta High Court and Hon'ble Gujarat High Court, Hon'ble Allahabad High Court and other judgments as available and thereafter has come to the conclusion that the provisions of section 40(a)(ia) are mandatory in nature and non compliance/non deduction of tax attracts disallowance of the entire amount. Having said so, we will be failing in our duty if we do not discuss the amendment brought in by the Finance (No. 2) Act 2014 with effect from 1.4.2015 by virtue of which proviso to section 40(a)(ia) has been inserted, which provides that if an....