ITA NO. 1300/Del/2012
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "E", NEW DELHI
BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER
AND
SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER
I.T.A. No. 1300/Del/2012
A.Y. : 2008-09
Income Tax Officer, vs. Sh. Naresh Kumar
Ward 38(2), Room No. 234A, Through Legal Heir Sh. Naveen
2nd floor, CR Bldg., IP Estate, Kumar,
New Delhi 9307, Gaushala Marg,
Kishan Ganj
Delhi 110 006
(PAN/GIR NO. :AALPK0199D)
(Appellant ) (Respondent )
Assessee by : Sh. J.C. Aggarwal, CA
Department by : Sh. R.S. Negi, Sr. D.R.
ORDER
PER SHAMIM YAHYA: AM
This appeal by the Revenue is directed against the order of the
Ld. Commissioner of Income Tax (Appeals)-XXVIII, New Delhi dated
05.1.2012 pertaining to assessment year 2008-09.
2. The grounds raised read as under:-
"1. The Ld. Commissioner of Income Tax (Appeals)
grossly erred in deleting the addition of `
52,10,873/- made by the Assessing Officer u/s.
40(a)(ia) on account of late deposit of TDS made
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*by the assessee with respect to rent,
commission and maintenance expenses not
appreciating fact that the amendment brought
in the Income Tax Act u/s. 40(a)(ia) was only
effective from 01.4.2010 and not retrospective in
nature.
2. The appellant craves to add, amend or modify
the ground of appeal at any time."
3. In this case Assessing Officer noted that as per column 27(b) of
the Audit Report the following TDS has been deposited late.
Amount of Tax Due date for Details of
Deducted / collected remittance to payment;
at source (in `) Government Date/ (in `)
2,869/- 7/8/2007 23/9/2008
8,180/- 7/9/2007 23/9/2008
3,881/- 7/10/2007 23/9/2008
5,446/- 7/11/2007 23/9/2008
1,678/- 7/12/2007 23/9/2008
5,853/- 7/1/2008 23/9/2008
12,239/- 7/2/2008 23/9/2008
13,526/- 7/3/2008 23/9/2008
3.1 Assessing Officer further held that since the assessee was
required to deduct TDS @ 1.03% the amount on which TDS has been
deducted late comes to ` 5210873/-. Assessing Officer held that in
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view of the provisions of section 40a(ia), an addition of ` 5210873/-
would be made while computing the income of the assessee.
4. Before the Ld. Commissioner of Income Tax (Appeals) it was
submitted that the Assessing Officer has erred on the facts and
circumstances of the case in invoking the provisions of section
40(a)(ia). It was further submitted that the only question that could
arise in the instant case is whether the TDS deducted during the
financial year 2007-08 which was deposited on 23.9.2008 i.e. before
the date of filing of return of income for A.Y. 2008-09 relevant to F.Y.
2007-08 attracted the provisions of section 40A(ia) so that the amount
on which tax was deducted could be held to be not deductible under
that section. Assessee further referred to the provisions of section
40A(ia)as under:-
"(ia) any interest.......... or amounts payable to a
contractor or sub-contractor, being resident,..............
on which tax is deductible at source under Chapter
XVII-B and such tax has not been deducted or, after
deduction, has not been paid on or before the due
date specified in sub section (1) of section 139.
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4.1 Referring to the above, assessee submitted that the aforesaid
section is attracted in either of the following situations:-
a) If the TDS is deductible but has not been deducted.
b) If the TDS has been deducted but has not been paid
before 30.9.2008.
4.2 It was submitted neither of the situations is attracted in the case
of the assessee. The deductible tax has been deducted and the
deducted tax has been deposited before 30.9.2008.
4.3 Assessee further placed reliance on the following case laws:-
a) Calcutta High Court in the C.I.T., Kol-XI, Kol vs. Virgin
Creations (ITA No. 302 of 2011, GA 32000/2011).
b) ITAT, Mumbai `B' Bench in Bansal Parivahan (India)
Pvt. Ltd. vs. ITO (2011) 137 TT (Mumbai) 319 : (2011)
43 SOT 619: (2011) 53 DTR 40 : (2011) 9 ITR 565.
c) ITAT, Ahmedabad `A' Bench in Dynamic Builders vs.
ITO (ITA No. 1625/Ahd./2008)
d) ITAT, Ahmedabad `A' Bench in Aavkar Developers vs.
ITO (ITA No. 3165 / Ahd./ 2009).
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e) ITAT, Mumbai `G' Bench in Golden Stables Life Centre
Pvt. Ltd. vs. C.I.T. (ITA No. 5145/Mum/2009) reported
at 2010-TIOL-596-ITAT-Mum.
4.4 It was submitted in all the above cases, it has been held that
provision inserted by Finance Act, 2010 is retrospective in nature. Ld.
Commissioner of Income Tax (Appeals) considered the above, he
referred to the decision of ITAT, Mumbai `B' Bench in Bansal Parivahan
(India) Pvt. Ltd. vs. ITO (2011) 9 ITR 565 and held as under:-
".....The provisions of s. 40(a)(ia) as stood prior to the
amendments made by the Finance Act, 2010 thus
were resulting into unintended consequences and
causing grave and genuine hardships to the assessee
who had substantially complied with the relevant TDS
provisions by deducting the tax at source and by
paying the same to the credit of the Government
before the due date of filing of their returns under s.
139(1). In order to remedy this position and to
remove the hardships which was being caused to the
assessee's belonging to such category, amendments
have been made in the provisions of s. 40(a)(ia) by the
Finance Act, 2010. The said amendments, in our
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opinion, thus are clearly remedial / curative in nature
as held by Hon'ble Supreme Court in the case of Allied
Motors (P) Ltd. (supra) and Alom Extrusions Ltd.
(supra) and the same therefore would apply
retrospectively w.e.f. 1st April, 2005. In the case of
R.B. Jodha Mal Kuthiala vs. C.I.T. (1971) 82 ITR 570
(Supreme Court), it was held by the Hon'ble Supreme
Court that a proviso which is inserted to remedy
intended consequences and to make the provisions
workable, requires to be treated as retrospective in
operation so that a reasonable interpretation can be
given to the section as a whole. In the present case,
the amount of TDS from the freight charges during the
period 1st April, 2005 to 28th Feb, 2006 was paid by the
assessee in the months of July and August, 2006 i.e.,
well before the due date of filing of its return of
income for the year under consideration. This being
the undisputed position, we hold that the
disallowance made by the Assessing Officer and
confirmed by the Ld. Commissioner of Income Tax
(Appeals) on account of freight charges by invoking
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the provisions of s. 40(a)(ia) is not sustainable as per
the amendments made in the said provisions by the
Finance Act, 2010 which, being remedial /curative in
nature have retrospective application. Accordingly,
we delete the said disallowance and allow ground no.
2 of this appeal."
4.5 Ld. Commissioner of Income Tax (Appeals) further referred the
decision of the Hon'ble Calcutta High Court in the case of
Commissioner of Income Tax, Kol vs. Virgin Creations (ITA No. 302 of
2011, GA 32000/2011) where it was held that the amendment in
section 40(a)(ia) is remedial /curative in nature and has retrospective
effect. In view of these decisions and the facts of the case, the
disallowance made by the Assessing Officer u/s. 40(a)(ia) to the tune
of ` 52,10,873/- was deleted.
5. Against the above order the Revenue is in appeal before us.
6. We have heard the rival contentions in light of the material
produced and precedent relied upon. We find that the only grievance
of the Revenue is that the amendment brought in the Income Tax Act
u/s. 40(a(ia) was only effective from 1.4.2010 and not retrospective in
nature. However, we find that in a catena of case laws as mentioned,
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it has been held that the amendment in section 40(a)(ia) is remedial
and curative in nature and has retrospective effect. In this case,
admittedly, the TDS deducted was deposited before the date of the
filing of the return and under such situation, there cannot be any
disallowance u/s. 40(a)(ia). Thus we find that Ld. Commissioner of
Income Tax (Appeals) has taken a correct view in the matter, which
does not need any interference on our part. Accordingly, we uphold
the same.
7. In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced in the open court on 21/5/2012, upon
conclusion of hearing.
Sd/- Sd/-
JAIN]
[A.D. JAIN] [SHAMIM YAHYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Date 21/5/2012
"SRBHATNAGAR"
Copy forwarded to: -
1. Appellant 2. Respondent 3. CIT 4. CIT (A)
5. DR, ITAT
TRUE COPY
By Order,
Assistant Registrar,
ITAT, Delhi Benches
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