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TMI Blog2014 (11) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt under Article 141 of the Constitution of India - A mere dismissal by one word, the Apex Court does not lay down any law – thus, the order of the CIT(A) is upheld – Decided against assessee. - ITA No. 767/Coch/2013, ITA No.235/Coch/2014 - - - Dated:- 17-10-2014 - Shri N. R. S. Ganesan (JM) And Shri Chandra Poojari (AM),JJ. For the Appellant : Shri CBM Warrier For the Respondent : Shri M. Anil Kumar, CIT ORDER Per N.R.S. Ganesan (JM) Both the appeals of the assessee are directed against the respective orders of the CIT(A) for the assessment year 2007-08. ITA No.767/Coch/2013 arises out of the order passed u/s 143(3) whereas ITA No.235/Coch/2014 arises out of the order passed by the assessing officer on re-assessment u/s 147 of the Act. 2. Shri CBM Warrier, the ld.representative for the assessee submitted that the only issue arises for consideration is with regard to disallowance made u/s 40(a)(ia) of the Act. The ld.representative submitted that the assessee is not disputing the liability to deduct tax. According to the ld.representative, provisions of section 40(a)(ia) are not applicable in respect of the amount already paid. Referring to section 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the Special Bench is not correct in confining the disallowance only to the amounts remained to be paid. The Calcutta High Court specifically found that section 40(a)(ia) is applicable in respect of the amounts paid and payable. Therefore, the decision of the Special Bench of this Tribunal was found to be not correct. 6. The Gujarat High Court in the case of CIT vs Sikandarkhan N Tunvar ITA Nos 905 of 2012, 709 710 of 2012, 333 of 2013, 832 of 2012, 857 of 2012, 894 of 2012, 928 of 2012, 12 of 2013, 51 of 2013, 58 of 2013 and 218 of 2013 judgment dated 02-05-2013 also had examined the correctness of the Special Bench decision in Merilyn Shipping Transports (supra). The Gujarat High Court after considering all the relevant facts and the reasoning given by the Special Bench in Merilyn Shipping Transports (supra) found that the decision of the Special Bench of this Tribunal in Merilyn Shipping Transports (supra) does not express the correct position of law. 7. In view of the above, the decision of the Special Bench of this Tribunal at Visakhapatnam in Merilyn Shipping Transports (supra) may not be applicable to the facts of the case. 8. The Allahabad High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post amendment law is permissible for the purpose of ascertaining the mischief sought to be remedied or the object sought to be achieved by an amendment. This is precisely what was done by the Apex Court in the case of CIT Vs. Kelvinator reported in 2010(2) SCC 723. But the same comparison between the draft and the enacted law is not permissible. Nor can the draft or the bill be used for the purpose of regulating the meaning and purport of the enacted law. It is the finally enacted law which is the will of the legislature. The Learned Tribunal fell into an error in not realizing this aspect of the matter. The Learned Tribunal held that where language is clear the intention of the legislature is to be gathered from the language used . Having held so, it was not open to seek to interpret the section on the basis of any comparison between the draft and the section actually enacted nor was it open to speculate as to the effect of the so-called representations made by the professional bodies. The Learned Tribunal held that Section 40(a)(ia) of the Act creates a legal fiction by virtue of which even the genuine and admissible expenses claimed by an assessee under the head in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re asking was to read in that definition, these precise words, which were consciously and deliberately omitted from the definition. That would amount to supplying the casus omissus and we do not think that it is possible, particularly, in this case. The law of supplying the casus omissus by the courts is extremely clear and settled that though this Court may supply the casus omissus, it would be in the rarest of the rate case and thus supplying of this casus omissus would be extremely necessary due to the inadvertent omission on the part of the legislature. But, that is certainly not the case here. We shall now endeavour to show that no other interpretation is possible. The key words used in Section 40(a)(ia), according to us, are on which tax is deductible at source under Chapter XVII-B . If the question is which expenses are sought to be disallowed? The answer is bound to be those expenses on which tax is deductible at source under Chapter XVII-B. Once this is realized nothing turns on the basis of the fact that the legislature used the word 'payable' and not 'paid or credited'. Unless any amount is payable, it can neither be paid nor credited. If n amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion. In this context, we would like to examine two aspects. Firstly, what would be the correct interpretation of the said provision. Secondly, whether our such understanding of the language used by the legislature should waver on the premise that as propounded by the Tribunal, this was a case of conscious omission on the part of the Parliament. Both these aspects we would address one after another. If one looks closely to the provision, in question, adverse consequences of not being able to claim deduction on certain payments irrespective of the provisions contained in Sections 30 to 38 of the Act would flow if the following requirements are satisfied:- (a) There is interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services payable to resident or amounts payable to a contractor or sub-contractor being resident for carrying out any work. (b) These amounts are such on which tax is deductible at source under XVIII-B. (c) Such tax has not been deducted or after deduction has not been paid on or before due date specified in sub-Section (1) of Section 39. For the purpose of current discussion reference to the proviso is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of Commissioner of Income-Tax, Gujarat vs. Ashokbhai Chimanbhai (supra), would no6t alter this situation. The said decision, of course, recognizes the concept of ascertaining the profit and loss from the business or profession with reference to a certain period i.e. the accounting year. In this context, last date of such accounting period would assume considerable significance. However, this decision nowhere indicates that the events which take place during the accounting period should be ignored and the ascertainment of fulfilling a certain condition provided under the statute must be judged with reference to last date of the accounting period. Particularly, in the context of requirements of Section 40(a)(ia) of the Act, we see no warrant in the said decision of the Supreme Court to apply the test of payability only as on 31st March of the year under consideration. Merely because, accounts are closed on that date and the computation of profit and loss is to be judged with reference to such date, does not mean that whether an amount is payable or not must be ascertained on the strength of the position emerging on 31t March. 25. This brings us to the second aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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