9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (10) TMI 515 - AT - Income TaxNon deduction of TDS - Disallowance u/s 40(a)(ia) - Held that - As decided in Shri Piyush C. Mehta Versus The ACIT Mumbai 2012 (4) TMI 349 - ITAT MUMBAI following the decision in CIT, KOL-XI, KOL Versus VIRGIN CREATIONS 2011 (11) TMI 348 - CALCUTTA HIGH COURT Amendment to the provisions of Sec. 40(a)(ia) by the Finance Act, 2010 is retrospective from 1.4.2005. Consequently, any payment of tax deducted at source during previous years relevant can be made to the Government on or before the due date for filing return of income u/s.139(1) of the Act. If payments are made as aforesaid, then no deduction u/s. 40(a)(ia) can be made. As in the present case assessee has deducted TDS on an amount of Rs.66,29,926/- out of deductible amount of Rs.73,65,220/- and paid the same on 4th of August, 2008 as per copy of TDS challans which is well within the due date for filing of the return as provided under sec. 139(1) - in favour of assessee.
Issues Involved:
1. Disallowance under Section 40(a)(ia) of the Income-tax Act, 1961. 2. Deduction and deposit of TDS by the assessee. 3. Retrospective application of the amendment to Section 40(a)(ia) by the Finance Act, 2010. Issue-wise Detailed Analysis: 1. Disallowance under Section 40(a)(ia) of the Income-tax Act, 1961: The primary issue in this case was the disallowance of Rs. 73,65,220/- by the Assessing Officer (AO) under Section 40(a)(ia) due to the assessee's failure to deduct and deposit TDS within the stipulated time. The AO observed that the assessee did not deduct TDS on Rs. 7,35,294/- and deposited the deducted TDS amounting to Rs. 66,29,926/- only on 4-08-2008, which was beyond the due date prescribed under the Act. 2. Deduction and deposit of TDS by the assessee: The assessee argued that the entire TDS was paid before the due date for filing the return of income, and hence, no disallowance should be made under Section 40(a)(ia) as per the amendment by the Finance Act, 2010. The AO, however, disallowed Rs. 66,29,926/- for violation of the provisions of Section 40(a)(ia) and added it back to the income of the assessee. Additionally, the AO disallowed Rs. 7,35,294/- as the assessee admitted to not deducting any TDS on this amount. 3. Retrospective application of the amendment to Section 40(a)(ia) by the Finance Act, 2010: The assessee appealed to the CIT(A), who upheld the AO's decision, stating that the amendment by the Finance Act, 2010 was prospective and not applicable to earlier years, as held by the Special Bench in the case of M/s. Bharati Shipyard Ltd. The assessee further appealed to the ITAT, contending that the retrospective effect of the amendment had been upheld by the Calcutta High Court in the case of CIT vs. Virgin Creations and by the Mumbai ITAT in the case of Shri Piyush C. Mehta. The ITAT examined the legislative history and judicial precedents, noting that the amendment aimed to remove unintended hardships and was therefore remedial and curative in nature, warranting retrospective application from 1.4.2005. The ITAT cited the Calcutta High Court's decision in Virgin Creations, which held that the amendment had retrospective effect, and followed the principle that decisions of higher judicial authorities should be adhered to, even if they are from non-jurisdictional High Courts. Conclusion: The ITAT concluded that the assessee had deducted and paid the TDS within the due date for filing the return under Section 139(1) of the Act. Therefore, the disallowance of Rs. 66,29,926/- under Section 40(a)(ia) was not sustainable. The appeal of the assessee was allowed, and the addition made by the AO and confirmed by the CIT(A) was directed to be deleted. Final Order: The appeal of the assessee was allowed, and the order was pronounced in the Open Court on 8th October 2012.
|
