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TMI Blog2024 (8) TMI 1025X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner of Income Tax (Appeals) ("CIT-A") has been allowed, thereby granting to the Respondent-Assesses benefit under Section 40 (a) (ia) as amended by the Finance Act, 2014. The effect being that the Tribunal has held that the disallowance as considered by the Assessing Officer and as confirmed by the CIT-A would not be the full amount of expenditure as claimed by the Respondent-Assessee, it would be restricted to 30% of such expenditure. 2. The assessment year in question is assessment year 2006- 07. Briefly the facts are:- The Assessee who is in the business of hot mix plant, road construction and hiring of equipment and vehicles had filed return of income declaring total income of Rs.24,29,729/- which was filed on 3rd March, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such expenses could be allowed in the year in which the amounts were deposited into the Governments' account. The Assessing Officer also recorded that as in this regard the tax audit report was silent and although late payment of TDS, after the prescribed date was being disallowed under Section 40 (a) (ia) of the Act in the computation of income, it would be required to be held that the assessee had furnished the inaccurate particulars of income. Hence, penalty proceedings under Section 271(1) were being separately initiated. 3. In the aforesaid circumstances, such expenditure being disallowed, the Assessee assailed the assessment order before CITA who upheld the assessment order passed by the Assessing Officer. It was observed that Circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner of Income Tax 2015 63 Taxman 99 (Kerala) was relied before the Tribunal. 5. The assessee also argued that the amendment to Section 40 (a) (ia) with effect from 01.04.2015 was introduced, to reduce hardship caused to the assessee's and that the Tribunal in the case of Amruta Quarry Works (supra) had held that amendment to Section 40 (a) (ia) of the Act with effect from 01.04.2015 was retrospective in nature. It was argued that, hence the disallowance must be restricted to 30% of the expenses on which tax was not deducted by the assessee within the time limit prescribed under the Act. Accordingly, applying the decision in Rajendra Singh Yadav Vs. Income Tax Officer, Bhilwara and Amruta Quarry Works (supra), the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of section 40 (a) of the Act, as inserted by the Finance (No. 2) Act, 2004 with effect from April 1, 2005 is applicable only from the financial year 2005-06 and, hence, is not applicable to the present case relating to the financial year 2004-05; and, at any rate, whole of the rigour of this provision cannot be applied to the present case?" 8. In answering such issue and in the context of what was earlier held by the Supreme Court in the case of CIT vs. Calcutta Export Company [2018] 404 ITR 654 (SC), the Supreme Court, considering the effect of amendment brought about by the Finance Act, 2010 to the provisions of Section 40 (a) (ia), observed that the amendment as brought about by Finance Act, 2010 was retrospective in operation, being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nciples adopted by this court in the case of Calcutta Export Company (supra) dealing with curative amendment, relating more to the procedural aspects concerning deposit of the deducted TDS, be applied to the amendment of the substantive provision by the Finance (No. 2) Act, 2014. 19.6 We may in the passing observe that the assessee appellant was either labouring under the mistaken impression that he was not required to deduct TDS or under the mistaken belief that the methodology of splitting a single payment into parts below Rs.20,000/- would provide him escape from the rigour of the provisions of the Act providing for disallowance. In either event, the appellant had not been a bona fide assessee who had made the deduction and deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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