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TMI Blog2013 (2) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... Barathvaja Sankar and George K, JJ. Appellant Rep by: Shri Krishnaswamy, CA Respondent Rep by: Shri Patanjali, CIT-III ORDER Per: George George K: This appeal instituted by the assessee is directed against the order of the CIT(A)-II, Bangalore, dated 21.02.2012. The relevant assessment year is 2009-10. 2. The grounds raised reads as follows:- i) The learned CIT(A) and Addl. CIT erred in holding that the extended period of limitation for payment of tax deducted at source (before the due date for filing of return) was not retrospectively applicable to assessment year 2009-10 as the amendment made by Finance Act, 2010 to section 40(a)(ia) was not remedial and curative in nature. ii) The learned CIT(A) and Addl. CIT ought to have appreciated that the delayed payment of TDS was for 35 days in the sum of Rs.8,12,427/- and for such an act of short delay a disallowance ofRs.7,18,96,190/- cannot be envisaged by law resulting in a tax demand of Rs.3,17,73,390/-. iii) The learned CIT(A) and Addl. CIT ought to have appreciated that principles of natural justice required that a provision like s.40(a)(ia) which imposes unconscionable and unforeseen burden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from business, house property and other sources. The return of income was filed for the concerned assessment year disclosing a total income of Rs.3,11,82,064/-. The assessment was taken up for scrutiny by issuance of notice under section 143(2) of the Act. During the course of scrutiny assessment, it was noticed that the assessee had remitted the tax deducted at source for the month of January and February, 2009 only on 6/5/2009. According to the Assessing Officer, the assessee ought to have remitted the tax deducted at source on or before 31/3/2009. The details of nature of payment, the month on which the tax was deducted, the amount that was credited, tax that was credited and the payment dates are as follows:- Nature of payment Code Month Amount credited Tax deducted Tax paid Challan No. and date of remittance Lorry hire charges 94C Jan. 09 3,21,29,110 3,63,059 3,63,059 00009 06/05/2009 Lorry Hire charges 94C Feb. 09 3,97,67,080 4,49,368 4,49,368 00010- 06/05/2009 Total 7,18,96,190 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 3/10/2011. 4. The assessee being aggrieved carried the matter in appeal before the first appellate authority. 5. Before the first appellate authority, the first argument that was taken was the amendment to section 40(a)(ia) by Finance Act, 2010 has retrospective effect from 1/4/2005 and the said amendment is clarificatory in nature. Secondly it was argued that the assessee hired vehicles from persons in an unorganized sector like small scale truck owners and take full control of the vehicles for transportation of goods with attendant responsibilities for damages etc. and hence, such an arrangement does not constitute sub-contract for carrying on work. The third argument that was taken before the first appellate authority was that the TDS provisions was not applicable to payments amounting to less than Rs.20,000/- or Rs.50,000/- aggregate payment in a year as provided under the I T Act and hence, such items are not hit by section 40(a)(ia) of the Act, although tax has been deducted. The fourth argument that was taken was that section 40(a)(ia) is applicable to only to items referred to in sections 30 to 38 of the Act and not to business income computation because of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision for expense liable for deduction of tax at source is sought to be disallowed in the event there is a default of deduction of tax at source. iii) Where the language is clear, the intention of the Legislature is to be gathered from the language used. What is to be borne in mind is as to what has been said in the statute, as also what has not been said. A construction which requires for its support, addition or substitution of words or which results in rejection of words has to be avoided, unless it is covered by the rule of exception, including that of necessity. In the present provision of section 40(a)(ia) of the Act there is no such exception and the only word provided by Legislature is payable . iv) Section 40(a)(ia) of the Act creates a legal fiction for the amounts outstanding or remaining payable at the end of every year as on 31st March and it cannot be extended for taxing the amounts already paid. No further legal fiction from elsewhere in the statute can be borrowed to extend the field of section 40(a)(ia) of the Act. This fiction cannot be extended any further and, therefore, cannot be invoked by Assessing Officer to disallow genuine and reasonable amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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