9911796707
TMI BlogFailure to deduct TDS and Disallowance of expenses: Supreme Court Clarifies Retrospective Application of Section 40(a)(ia) AmendmentsX X X X Extracts X X X X X X X X Extracts X X X X ..... dgment holds substantial implications for the interpretation of tax legislation, especially regarding compliance requirements and the applicability of amendments. Arguments Presented The primary contention of the Revenue was that the amendment made by the Finance Act, 2010 , to Section 40(a)(ia) of the IT Act was prospective, not retrospective. The Revenue argued that the lower courts erred in extending the benefit of the amendment to the respondent for the Assessment Year 2005-06. According to the Revenue, the amendment should apply only from the Assessment Year 2010-11 onwards. Conversely, the respondent contended that the amendment was curative and should be applied retrospectively. They argued that the intent behind the amendment was to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Relief The Finance Act, 2010 , further amended Section 40(a)(ia) to extend the time frame for depositing TDS for all twelve months of the financial year to the due date for filing the return of income. However, this amendment was specified to apply prospectively from the Assessment Year 2010-11 onwards, leading to ambiguity about its applicability to earlier years. Legislative Intent and Judicial Precedents The Court delved into the legislative intent behind the amendments. The memorandum explaining the provisions of the Finance Act, 2008 , indicated that the purpose was to ensure tax compliance and not to penalize taxpayers who had substantially complied with the TDS provisions. The same intent was observed for the 2010 amendment, aimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010 amendment to Section 40(a)(ia) of the IT Act, which extended the time for depositing TDS to the due date for filing returns, was retrospective. The Court held that the amendment was curative and should apply retrospectively from April 1, 2005, aligning with the legislative intent to alleviate taxpayer hardship and ensure compliance. Consequently, the respondent was allowed to claim the deduction for the commission paid after the previous year till date of filing of return, and the Revenue's appeal was dismissed. Full Text : 2018 (5) TMI 356 - Supreme Court - FAQ - Frequently Asked Questions, TMI Short Notes , Experts comment, opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
