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2014 (11) TMI 720 - AT - Income TaxDisallowance u/s 40(a)(ia) – Tax withholding obligations u/s 194C and 194J discharged or not - Lab testing charges and printing the stationery expenses – Held that:- Following the decision in Rajeev Kumar Agarwal Versus Additional Commissioner of Income Tax [2014 (6) TMI 79 - ITAT AGRA] - the second proviso is declaratory and curative in nature and has retrospective effect from 1.4.2005 - a penalty for tax withholding lapse but it is a sort of compensatory deduction restriction for an income going untaxed due to tax Withholding lapse - the effect that a curative amendment to avoid unintended consequences is to be treated as retrospective in nature even though it may not state so specifically, the insertion of second proviso must be given retrospective effect from the point of time when the related legal provision was introduced – thus, the insertion of second proviso to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005 – thus, the AO is directed to verify whether the payee has filed his return of income and paid taxes within the stipulated time – Decided in favour of revenue.
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