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TMI Blog2014 (11) TMI 1108X X X X Extracts X X X X X X X X Extracts X X X X ..... s 139(1) or 139(4) or within the time provided by the assessee in the notice issued u/s 142(1) of the Act or u/s 148 of the Act and a claim was made for deduction u/s 80P of the Act. In view of the above, this Tribunal do not find any infirmity in the order of the lower authority. - I.T.A No. 361/Coch/2012 - - - Dated:- 21-11-2014 - Shri N.R.S. Ganesan (JM) and Shri Chandra Poojari (AM) Appellant by : Shri Arun Raj S Respondent by : Shri K.K. John O R D E R Per N.R.S. Ganesan (JM) This appeal of the assessee is directed against the order of the CIT(A)-II, Kozhikode dated 21-09-2012 and pertains to assessment year 2009-10. 2. The first issue arises for consideration is deduction u/s 80P of the Act. 3. We heard Shri Arun Raj S, the ld.counsel for the assessee and Shri K.K. John, the ld.DR. 4. It is not in dispute that the assessee has not filed any return of income within the time allowed either u/s 139(1) or 139(4) or within the time allowed by the assessing officer u/s 142(1) of the Act. This Tribunal, in the case of M/s Kadachira Service Co-operative Bank Ltd Ors vs ITO (2013) 153 TTJ (Cochin) 129 after considering the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther (supra) and the Gujarat High Court in Sikandarkhan N Tunwar (supra) and confirmed the disallowance made by the lower authorities. 8. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the interest was paid by the assessee to the depositors. It is also an admitted fact that tax was not deducted tax as required at the time of making the payment of interest. 10. The contention of the assessee is that since the interest was already paid, provisions of section 40(a)(ia) is not applicable. The contention of the assessee is that provisions of section 40(a)(ia) is applicable only in respect of the amounts remains to be paid as on the last day of the financial year. This Tribunal is unable to uphold the contention of the assessee. This Tribunal had an occasion to examine an identical set of facts in Shri Thomas George Muthoot Ors (supra). This Tribunal, after a detailed discussion, decided the issue in the following manner: 6. Now coming to the contention of the assessee that the recipient firm has already paid the tax, this Tribunal finds no merit in such contention. The Apex Court, in Hindustan Coco Cola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd paid tax on the said sum on the date of furnishing of the return of income. 9. The next question arises for consideration is whether the second proviso to section 40(a)(ia) as incorporated by Finance Act, 2012 is retrospective in operation or prospective in operation. We are conscious that some of the benches of this Tribunal in the country has taken the view that the second proviso to section 40(a)(ia) is retrospective in operation, therefore, applicable to earlier period also. However, the jurisdictional High Court in the case of Prudential Logistics Transports in ITA No. 01 of 2014 judgment dated 13th January, 2014, copy of which has been filed by the ld.DR, found that the second proviso is not applicable for earlier assessment years. In fact, the Kerala High Court has observed as follows: 5. Reading of Section 40a(ia) along with 2nd proviso and Section 201(1) along with proviso, it would mean that the mandate or requirement on the part of the payer to deduct tax at source is not so strict if they are able to show that the payee or the recipient of the amounts has paid tax in accordance with the provisions of Section 201(1) and the proviso. 6. This was not the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, while dismissing the SLP, the Apex Court did not declare any law. Hence, we cannot say that the Apex Court has declared the law declaring that section 40(a)(ia) is applicable only in respect of the amounts remains to be payable at the last day of the financial year. 12. We have also carefully gone through the judgment of the Allahabad High Court in CIT vs M/s Vector Shipping Services (P) Ltd (supra), copy of which is filed by the assessee. The Allahabad High Court, after reproducing the relevant paragraph from the order of CIT(A) and referring to the decision of the Special Bench of this Tribunal in Merilyin Shipping Transports (supra) found that the Tribunal has not committed an error. It is obvious that there is no discussion about the correctness or otherwise of the decision rendered by the Special Bench of this Tribunal in Merilyn Shipping Transports (supra). However, we find that 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 considered the decision of the Special B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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 income from business and profession : if the assessee does not deduct TDS on such expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 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 amount has neither been paid nor credited, there can be no occasion for claiming any deduction. The language used in the draft was u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision. 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 subcontractor 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 not necessary. 24. What this Sub-Section, therefore, requires is that there should be an amount payable in the nature described ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision, 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 f 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 of this discussion, namely, whether this is a case of conscious omission and therefore, the legislature must be seen to have deliberat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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