9911796707
TMI Blog2012 (9) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... d TDS not deducted is as under: Head under which expenses claimed Payments made/credited before March Date of payment/credit after March 08 Total Date for deposit of TDS for payments made upto March 08 Date of deposit of TDS Rent 506000 46000 552000 31/3/2008 13/6/2008 Commission 1066256 105488 1173744 31/3/2008 13/6/2008 Maintenance Expenses 101200 9200 110400 31/3/2008 13/6/2008 Rent 300000 - 300000 31/3/08 Not deducted Total 1975446 According to the provisions of law, tax is deductible (and is so deducted) during any month but other than the last month (i.e. any time before March 1) of the previous year but is not deposited on or before March 31 of the previous year, the expenditure claimed in the current previous year is not deductible. But, if tax deposited with the Govt. after the end of the current previous year, the expenditure will be deductible in that year in which tax is deposited. The assessee has defaulted in deposit of TDS u/s 40(a)(ia). As such an addition of Rs.1975456 would be made u/s 40(a)(ia) of the Act, while computing the income of the assessee. However, the assessee has made the payment of TDS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn under section 139(1) and since TDS has been deducted and paid within time stipulated for filing of the return u/s 139(1), therefore, CIT(A) has passed a legal and correct order to delete the impugned addition whose action being legally proper and justified, needs to be further confirmed, which may be confirmed. 6. After having heard both the sides and considering the material on record as well as precedent relied upon, we find that undisputably the tax deducted has been paid within due date for filing of return u/s 139(1) and as per Hon'ble Calcutta High Court, amendment made u/s 40(a)(ia) brought out by Finance Act, 2010, is though effective from 1.4.2010 is to be treated as retrospectively effective from 1.4.2005 and relevant portion of the judgment of Calcutta High Court as incorporated in Mumbai Bench order dated 11.04.2012 from paras.14 onwards read as under: 14. The question as to whether the Amendment by the Finance Act, 2010 as aforesaid is prospective or retrospective from 1.4.2005 came up for consideration before the Mumbai Special Bench ITAT in the case of Bharati Shipyard Ltd. Before the Special Bench it was argued that the amendment was made with a view to remo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that the decisions of the Coordinate Benches are not binding and the Kolkata benches may take a different view, since Mumbai Bench after analyzing the provisions of Sec.40(a)9ia) since its inception and various amendments made to the same including the suggestion made by the Industry in the form of representation in their pre-budget memorandum to the Hon'ble Finance Minister and by applying the decision of the Hon'ble Apex Court in the case of Alom Extrusions Ltd., has observed that "The provisions of Section 40(a)(ia) as stood prior to the amendments made by the Finance Act 2010 thus were resulting into unintended consequences and causing grave and genuine hardships to the assesses who had substantially complied with the relevant TDS provisions by deducting the taxes at source and by paying the same to the credit of the Government before the due date of filing of their returns u/s.139(1). In order to remedy this position and to remove the hardships which was being caused to the assessee belonging to such category, amendments have been made in the provisions of Section 40(a)(ia) by the Finance Act, 2010. The said amendments, in our opinion, thus are clearly remedial/curative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Moreover, the Supreme Court, as has been recorded by the learned Tribunal, in the case of Allied Motors Pvt. Ltd. and also in the case of Alom Extrusions Ltd., has already decided that the aforesaid provision has retrospective application. Again, in the case reported in 82 ITR 570, the Supreme Court held that the provision, which has inserted the remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to the section as well. In view of the authoritative pronouncement of the Supreme Court, this court cannot decide otherwise. Hence we dismiss the appeal without any order as to costs." 17. It can be seen from the above decision of the Hon'ble Calcutta High Court that Amendment to the provisions of Sec.40(a)(ia) of the Act, by the Finance Act, 2010 as aforesaid was held to be retrospective from 1.4.2005. If the amendment is considered as retrospective from 1.4.2005, the effect will be that payments of TDS to the credit of the Government on or before the last date for filing return of income u/s.139(1) of the Act for the relevant AY have to be allowed as deduction. Admittedly in the case of the Assessee p ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
