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TMI Blog2014 (11) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... 40a(ia) of the IT Act, 1961 (in short 'The Act'). 3. Facts apropos are that the assessee engaged in the business of design, supply, erection and commissioning of material handling systems has declared an income of Rs. 7,07,08,019/- for the impugned assessment year. During the course of assessment proceedings it was noticed by the AO that deduction of tax at source were made by the assessee in certain cases after due date and also remitted after the due date. Argument of the assessee was that though, there was delay in remitting the taxes to the Government these were indeed paid before the due date of filing of return of income. However, the AO was not impressed. As per the AO the taxes deductible by the assessee was not on payments effecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ia) was having retrospective operation and such retrospectivity applied from 01-04- 2005 itself. It was held by their Lordship that remittances of deducted tax, if made before the due date of filing the return would be enough and Section 40a (ia) would not be attracted. The same view was taken by the Co-ordinate Bench of this Tribunal in the case of Shri Santosh Kumar Shetty Vs ACIT (ITA No.1194(B)/12 dated 26-07-2013. Co-ordinate Bench held that in view of the decision of the Hon'ble Kolkata High Court in the case of CIT Vs Virgin Creations, (supra) the decision of the Special Bench in the case of Bharati Shipyard Ltd., Vs DCIT(2011)132 ITD 53 was no more good law. Revenue had carried the matter before the Hon'ble Karnataka High Court and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion of retrospectivity raised in these present appeals, the focal question, therefore, would be whether the amendment brought about by way of Finance Act 2010 in section 40 (a)(ia) with effect from 1-4- 2010 could be said to be clarificatory in nature for attending to unintended consequences, and therefore, is having retrospective effect from 1-4-2005. 16: A closer examination needs to be done as to whether the amended provision aims to expand the prevailing position and whether the same being in the nature of curative, retrospectivity of the same is permissible as is being contended for and on behalf of the assessee. At this stage, therefore, the true effect of such amendment needs to be discerned. 16.1: It is demonstrated before us t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o amount could be deducted while computing the income, under Chapter IV of the 'computation of business income'. 16.3: Thereafter, by way of amendment of Finance Act, 2008, further amendment was made whereby TDS deductible and deducted in the last month of previous year if was not paid till the due date of filing of return under subsection (1) of section 139 and in any other case, on or before the last day of the previous year, section 40(a)(ia) provided for the disallowance of expenses like interest, commission, brokerage, etc. 16.4: Since, this had created anomaly, whereby tax deducted in the last month was permitted payment till filing of return as per sub-section (1) of section 139 whereas for the TDS deducted during the rest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the memorandum explaining the provision of the Finance Bill. 16.7: Giving plain or natural meaning to the amendment as contended by the Department, if is likely to create a situation enhancing the hardship and advance discrimination, purposive and. reasonable interpretation is required to be given by the Court. When plain interpretation frustrates the very legislative intent, the Court is expected to bear in mind the legislative intent from the language used in the statute with the help of permissible tools of interpretation of statute. 17: The core issue as to whether the amendment made by the Finance Act 2010 to section 40(a)(ia) of the Act is retrospective from the date of insertion of the provision i.e., 1st April, 2005 therefore need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dditional time for most deductors up to September of the next financial year. 17.1: We draw further support from the fact that the rigour of payment of interest is also enhanced by increasing the interest (charged on tax deducted, if any deposit by the specified date i.e., up to the filing of the return is not made from 12 per cent to 18 per cent per annum in the provision of section 201 (1A). Prior to the said amendment of Finance Act, 2010 under section 201 (1A), assessee was liable to pay simple interest at one per cent for every month or part of month, in case of failure to deduct tax on payment of deducted tax, increase is made correspondingly from one per cent to one and half per cent for every month or part of month for discouraging ..... X X X X Extracts X X X X X X X X Extracts X X X X
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