TMI Blog2020 (11) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... ed TDS on the transportation payments, which were required to be deducted as per the provisions of Section 194C of the Act for the financial year 2005-06 and the section 40(a)(ia) of the Act was inserted w.e.f.01.04.2005 by the Finance Act No.2. In this case the Hon ble Apex Court decided the case against the assessee and in favour of revenue by holding this provisions is applicable for the assessment year 2005-06. Before us, the impugned case is for the assessment year 2012-2013 and the provisions has been inserted w.e.f.01.04.2013 will not apply in the ratio decidendi above. In the written submissions, the assessee has relied many judgments which have been reproduced above are not applicable considering to the latest judgment of the Hon ble Supreme Court in the case of Shree Choudhary Transport Company (supra). In the peculiar facts and circumstances of the case and the latest decision of the Hon ble Apex Court as stated supra, the case laws relied on by the ld. AR of the assessee is not applicable in the present case in hand. - Ground of appeal of the assessee is dismissed. Disallowance u/s.43B - assessee could not produce the challan copy - HELD THAT:- As these payments ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,900/- 4) That it is not correct to say that the amendment to second provision to section 40(a)(ia) with effect from 1.4.2013 is not applicable. It is settled law, that the amendment beneficial to the assessee has retrospective effect has been decided by Honourable Supreme Court in the case of CIT Vs. Doraisamy Chetty [1990] 183 ITR 559 (SC). 5) That the authorities below should have allowed sufficient opportunity to the appellant to furnish form 26A from recipients, in the greater interest of justice and fair play. 6) That the disallowance of EPF of ₹ 1,15,570/- u/s.43B is unjustified, illegal, arbitrary and therefore the learned CIT(Appeals) is not justified in confirming the same. 7) That the disallowance of gratuity payment to staff amounting to ₹ 2,70,000/- disallowed by the AO should not have been confirmed by the CIT(Appeals). 8) That statement of facts and grounds of appeal filed before the CIT(Appeals) may kindly be considered as a part of grounds of appeal before I.T.A.T. 9) That other grounds if any will be urged at the time of hearing of appeal. 2. The assessee has taken total nine grounds out of which ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. Therefore, the AO disallowed the same and added back to the total income of the assessee. The assessee has also claimed EPF paid to staff of ₹ 5,00,244/- during the year under consideration. The asked the assessee to produce the details payment of EPF to staff with supporting evidences and the assessee produced only the challan copies amounting to ₹ 3,84,674/- and could not produce the challan copy of ₹ 1,15,570/- which was payment in arrear from 2007-2008. Therefore, the AO disallowed ₹ 1,15,570/- under section 43B of the Act and added the same to the total income of the assessee. Accordingly, the AO made total addition of ₹ 60,93,567/- and assessed the total income of the assessee at ₹ 90,32,740/-. 4. Against the above order of AO, the assessee preferred appeal before the CIT(A) and the CIT(A) considering the submissions of the assessee and findings of AO, deleted the addition made on account of provision for bad and doubtful debts and partly confirmed the addition made u/s.40(a)(ia) of the Act to the extent of ₹ 36,30,998/- and deleted the addition of ₹ 48,150/- out of the total addition made by the AO of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd allowed the appeal. They have hold that insertion of second provision to Section 40(a)(ia) is declaratory and curative in nature and it has retrospective effect from 1st April, 2005 being the date from which sub clause (ia) of section 40(a) was inserted by the Finance Act, 2004. In the case of Kanu Bhai Ramji Bhai Vs. ITO, 135 TTJ 364 has also held that provision of section 40(a)(ia) as amended by the Finance Act, 2010 w.e.f. 1st April, 2010 is remedial in nature, designed to eliminate unintended consequences which may cause undue hardship to the tax payers and which made the provision unworkable or unjust in a specific situation and is of clarificatory in nature. Amendment has therefore to be treated as retrospective w.e.f. 1st April, 2005. The learned CIT(Appeals) writes that the second provision has been inserted w.e.f. from 1.4.2013 and therefore applicable for AY 2013-14 onwards. The CIT(Appeals) required Certificates from the recipients which is very much available in the Paper Book. Hence, the same may kindly be deleted. It is not correct to say that the amendment to second provision to sec 40 (a)(ia) with effect from 01.04.2013 is not applicable. It is set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iety asked members especially to the young members to give their time to collect funds for development of the co-operative bank. The person engaged are to go to the door steps of the members of the society. They are required to mobilize the society for this daily deposit scheme . The intention of the scheme was to generate employment amongst un-employed younger generation apart from collection of money to strengthen financial capacity of the fenk. That is why they are given some responsibility for improvement of the Bank. In the process they are paid honorary remuneration calculated @ 2% of the amount collected. The matter is intimated to the Registering Authority, Certificate from Bank in this regard is submitted herewith. They are paid Honorary remuneration as incentive. This is not commission but an incentive though it is named as agents commission. This is not a new scheme but continuing since long. The list of members engaged in this DLDS scheme for the year under consideration is enclosed herewith with their membership Nos. Another list is given furnishing the details of payment made to them. From the details furnished it would be apparent that none of the members exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further the ld. AR has relied on the decision of the Hon ble Supreme Court in the case of Attar Singh Gurmukh Singh Vs. ITO [1991] 191 ITR 667, 673(SC) and the decision of the coordinate bench of the Tribunal in the case of Kanubhai Ramjibai Vs. ITO, 135 TTJ (Ahd) 364. 7. On the other hand, ld. DR relied on the orders of authorities below and submitted that the assessee has not deducted TDS on payments made to the recipients which was ought to be deducted as per the TDS provisions as prescribed in the Income Tax Act. He also submitted that the amendment made in Section 40(a)(ia) of the Act is applicable from the A.Y.2013-2014. The case of the assessee falls before the amendment i.e. w.e.f.01.04.2013, hence, the case law relied on by the ld. AR of the assessee is not applicable in the present case. 8. After hearing both the sides and perusing the entire material available on record and the order of the authorities below, we noticed that the assessee has violated the provisions of Section 40(a)(ia) of the Act for not deducting depositing the TDS. The amendment has been made in the second proviso of Section 40(a)(ia) of the Act w.e.f. 01.04.2013 and, therefore, it is appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant point of time, this provision read as under:- 194C. Payments to contractors and sub-contractors.- (1) Any person responsible for paying any sum to any resident (hereafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and- (a) the Central Government or any State Government; or (b) any local authority; or (c) any corporation established by or under a Central, State or Provincial Act; or (d) any company; or (e) any co-operative society; or (f) any authority, constituted in India by or under any law, engaged either for the purpose of dealing with and satisfying the need for housing accommodation or for the purpose of planning, development or improvement of cities, towns and villages, or for both; or (g) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; or (h) any trust; or (i) any University established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payee and the provisions of this section shall apply accordingly. Explanation III. - For the purposes of this section, the expression Work shall also include- (a) advertising; (b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting; (c) carriage of goods and passengers by any mode of transport other than by railways; (d) catering. (3) No deduction shall be made under sub-section (1) or sub-section (2) from- (i) the amount of any sum credited or paid or likely to be credited or paid to the account of, or to, the contractor or subcontractor, if such sum does not exceed twenty thousand rupees: Provided that where the aggregate of the amounts of such sums credited or paid or likely to be credited or paid during the financial year exceeds fifty thousand rupees, the person responsible for paying such sums referred to in sub-section (1) or, as the case may be, sub-section (2) shall be liable to deduct income-tax under this section; or (ii) any sum credited or paid before the 1st day of June, 1972; or (iii) any sum credited or paid before the 1st day of June, 1973, in pursuance of a contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or company, as the case may be, has without good and sufficient reasons failed to deduct and pay the tax. (1A) Without prejudice to the provisions of sub-section (1), if any such person, principal officer or company as is referred to in that sub-section does not deduct the whole or any part of the tax or after deducting fails to pay the tax as required by or under this Act, he or it shall be liable to pay simple interest at twelve per cent per annum on the amount of such tax from the date on which such tax was deductible to the date on which such tax is actually paid. (2) Where the tax has not been paid as aforesaid after it is deducted, the amount of the tax together with the amount of simple interest thereon referred to in sub-section (1A) shall be a charge upon all the assets of the person, or the company, as the case may be, referred to in sub-section (1). 13.2 Chapter IV of the Act of 1961 deals with the subject Computation of Total Income and Section 40 occurs in Part D thereof, carrying the provisions relating to the Profits and Gains of Business or Profession . Even when Sections 30 to 38 provide for various allowances and deductions in computation o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act of 1961 defines various terms relevant to the income from profits and gains of business or profession; and clause (2) thereof, carrying the definition of the expression paid , having been referred in the present matter, could also be usefully reproduced as under:- 43. Definitions of certain terms relevant to income from profits and gains of business or profession. In sections 28 to 41 and in this section, unless the context otherwise requires- ** ** ** (2) paid means actually paid or incurred according to the method of accounting upon the basis of which the profits or gains are computed under the head Profits and gains of business or profession ; ** ** ** 13.4 For their relevance in relation to another segment of arguments, we may also take note of the meaning assigned to the expression assessment year in clause (9) of Section 2; and to the expression previous year in Section 3 of the Act of 1961 as follows: - 2. Definitions.- In this Act, unless the context otherwise requires, - * ** ** (9) assessment year means the period of twelve months commencing on the 1st day of April every year; ** ** ** 3. Previous y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of Section 194C(2) of the Act. 15.2 The suggestions on behalf of the appellant that the said truck operators/owners were not bound to supply the trucks as per the need of the appellant nor the freight payable to them was pre-determined, in our view, carry no meaning at all. Needless to observe that if a particular truck was not engaged, there existed no contract but, when any truck got engaged for the purpose of execution of the work undertaken by the appellant and freight charges were payable to its operator/owner upon execution of the work, i.e., transportation of the goods, all the essentials of making of a contract existed; and, as aforesaid, the said truck operator/owner became a sub-contractor for the purpose of the work in question. The AO, CIT(A) and the ITAT have concurrently decided this issue against the appellant with reference to the facts of the case, particularly after appreciating the nature of contract of the appellant with the consignor company as also the nature of dealing of the appellant, while holding that the truck operators/owners were engaged by the appellant as sub-contractors. The same findings have been endorsed by the High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, Baddi wherefor, the assessee received freight payments from the principal. The assessee got the transportation of LPG done through three persons to whom he made the freight payments. The Assessing Officer held that the assessee had entered into a sub-contract with the said three persons within the meaning of Section 194C of the Act. Such findings of AO were concurrently upheld up to the High Court and, after interpretation of Section 40(a)(ia), this Court also approved the decision of the High Court while dismissing the appeal with costs. Learned counsel for the appellant has made an attempt to distinguish the nature of contract in Palam Gas Service by suggesting that therein, the assessee's sub-contractors were specific and identified persons with whom the assessee had entered into contract whereas the present appellant was free to hire the service of any truck operator/owner and, in fact, the appellant hired the trucks only on need basis. In our view, such an attempt of differentiation is totally baseless and futile. Whether the appellant had specific and identified trucks on its rolls or had been picking them up on freelance basis, the legal effect on the status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions like sub-clause (ia) of clause (a) of Section 40 had been to ensure strict and punctual compliance of the requirement of deducting tax at source. In other words, the consequences, as provided therein, had the underlying objective of ensuring compliance of the requirements of TDS. It is also noteworthy that in the proviso added to clause (ia) of Section 40(a) of the Act, it was provided that where in respect of the sum referable to TDS requirement, tax has been deducted in any subsequent year, or has been deducted during the previous year but paid in any subsequent year after the expiry of the time prescribed in Section 200(1), such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. 16.3 The purpose and coverage of this provision as also protection therein have been tersely explained by this Court in the case of Calcutta Export Company (supra), which has been cited by learned counsel for the appellant in support of another limb of submissions which we shall be dealing with in the next question. For the present purpose, we may notice the relevant observations of this Court in Calcutta Export Company as regards S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is nothing in any of the sections that would warrant our reading the word 'shall' as 'may'. The point of time at which the deduction is to be made also establishes that the provisions are mandatory. For instance, under section 194C, a person responsible for paying the sum is required to deduct the tax at the time of credit of such sum to the account of the contractor or at the time of the payment thereof. . ' 12. While holding the aforesaid view, the Punjab and Haryana High Court discussed the judgments of the Calcutta and Madras High Courts, which had taken the same view, and concurred with the same, which is clear from the following discussion contained in the judgment of the Punjab and Haryana High Court: A Division Bench of the Calcutta High Court in CIT v. Crescent Export Syndicate [2013] 216 Taxman 258 (Cal) held : '13. The term shall used in all these sections make it clear that these are mandatory provisions and applicable to the entire sum contemplated under the respective sections. These sections do not give any leverage to the assessee to make the payment without making TDS. On the contrary, the intention of the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision, as follows (at p. 310 of ITR):- 15. We approve the aforesaid view as well. As a fortiori, it follows that section 40(a)(ia) covers not only those cases where the amount is payable but also when it is paid. In this behalf, one has to keep in mind the purpose with which section 40 was enacted and that has already been noted above. We have also to keep in mind the provisions of sections 194C and 200. Once it is found that the aforesaid sections mandate a person to deduct tax at source not only on the amounts payable but also when the sums are actually paid to the contractor, any person who does not adhere to this statutory obligation has to suffer the consequences which are stipulated in the Act itself. Certain consequences of failure to deduct tax at source from the payments made, where tax was to be deducted at source or failure to pay the same to the credit of the Central Government, are stipulated in section 201 of the Act. This section provides that in that contingency, such a person would be deemed to be an assessee in default in respect of such tax. While stipulating this consequence, section 201 categorically states that the aforesaid sections would be without p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot deducted and/or paid over to the Government account. 22. Section 40(a)(ia) refers to the nature of the default and the consequence of the default. The default is a failure to deduct the tax at source under Chapter XVII-B or after deduction the failure to pay over the same to the Government account. The term payable only indicates the type or nature of the payments by the assessees to the persons/payees referred to in section 40(a)(ia), such as, contractors. It is not in respect of every payment to a payee referred to in Chapter XVII-B that an assessee is bound to deduct tax. There may be payments to persons referred to in Chapter XVII-B, which do not attract the provisions of Chapter XVII-B. The consequences under section 40(a)(ia) would only operate on account of failure to deduct tax where the tax is liable to be deducted under the provisions of the Act and in particular Chapter XVII-B thereof. It is in that sense that the term payable has been used. The term payable is descriptive of the payments which attract the liability to deduct tax at source. It does not categorize defaults on the basis of when the payments are made to the payees of such amounts which attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Crescent Export Syndicate (supra). 16.9 We are in respectful agreement with the observations in Palam Gas Service that the enunciations in P.M.S. Diesels had been of correct interpretation of the provisions contained in Section 40(a)(ia) of the Act. The decision in Palam Gas Service covers the entire matter and the said decision, in our view, does not require any reconsideration. That being the position, the contention urged on behalf of the appellant that disallowance under section 40(a)(ia) does not relate to the amount already paid stands rejected. 16.10 Another contention in regard to Section 40(a)(ia) of the Act, that its scope cannot be decided on the basis of Section 194C, has only been noted to be rejected. The interplay of these provisions is not far to seek where Section 40(a)(ia) is not a stand-alone provision but provides one of those additional consequences as indicated in Section 201 of the Act for default by a person in compliance of the requirements of the provisions contained in Part B of Chapter XVII of the Act. The scheme of these provisions makes it clear that the default in compliance of the requirements of the provisions con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra). 17.1.1 Before proceeding further, it appears apposite to observe, as indicated in paragraph 7.3 hereinbefore, that in the copy of order passed by ITAT in this case, there is obvious typographical error on the date of coming into force of the amendment to Section 40 of the Act of 1961 by the Finance (No.2) Act, 2004 inasmuch as the said amendment was made applicable with effect from 1-4-2005 and not 1-4-2004, as appearing the copy of the order of ITAT. However, this error is not of material bearing because the amendment in question was applicable from and for the assessment year 2005-2006, for the reasons occurring infra. 17.2 Reverting to the contentions urged in this case, there is no doubt that in PIU Ghosh (supra), the Calcutta High Court, indeed, took the view which the learned counsel for the appellant has canvassed before us. The Calcutta High Court observed that the said Finance (No.2) Act, 2004 got presidential assent on 10-9-2004 and it was provided that the provision in question shall stand inserted with effect from 1-4-2005. According to the Calcutta High Court, the assessee could not have foreseen prior to 10-9-2004 that any amount paid to a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claration of law on the subject merely because the same has not been appealed against. Having examined the law applicable, with respect, we find it difficult to approve the above-quoted opinion of the Calcutta High Court, particularly when it does not appear standing in conformity with the scheme of assessment of income tax under the Act of 1961 and where the High Court seems to have not noticed the proviso to clause (ia) of Section 40(a) of the Act forming the part of the amendment in question. 17.4 It needs hardly any detailed discussion that in income tax matters, the law to be applied is that in force in the assessment year in question, unless stated otherwise by express intendment or by necessary implication. As per Section 4 of the Act of 1961, the charge of income tax is with reference to any assessment year, at such rate or rates as provided in any central enactment for the purpose, in respect of the total income of the previous year of any person. The expression previous year is defined in Section 3 of the Act to mean 'the financial year immediately preceding the assessment year'; and the expression assessment year is defined in clause (9) of Section 2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the present case. (emphasis in bold supplied) 17.6 We need not multiply on the case law on the subject as the principles aforesaid remain settled and unquestionable. Applying these principles to the case at hand, we are clearly of the view that the provision in question, having come into effect from 1-4-2005, would apply from and for the assessment year 2005-2006 and would be applicable for the assessment in question. Putting it differently, the legislature consciously made the said sub-clause (ia) of Section 40(a) of the Act effective from 1-4-2005, meaning thereby that the same was to be applicable from and for the assessment year 2005-2006; and neither there had been express intendment nor any implication that it would apply only from the financial year 2005-2006. 17.7 The observations of Calcutta High Court in the case of PIU Ghosh (supra) as regards the likely prejudice to an assessee in relation to the financial year 2004-2005, in our view, do not relate to any legal grievance or legal prejudice. The requirement of deducting tax at source was already existing as per Section 194C of the Act and it was the bounden duty of the appellant to make such deduction of TDS a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowance cannot be applied to the payments already made prior to 10-9-2004, the date on which the Finance (No.2) Act, 2004 received the assent of the President of India, remains equally baseless. The said date of assent of the President of India to Finance (No.2) Act, 2004 is not the date of applicability of the provision in question, for the specific date having been provided as 1-4-2005. Of course, the said date relates to the assessment year commencing from 1-4-2005 (i.e., assessment year 2005-2006). 18.1 Even if it be assumed, going by the suggestions of the appellant, that the requirements of Section 40(a)(ia) became known on 10-9-2004, the appellant could have taken all the requisite steps to make deductions or, in any case, to make payment of the TDS amount to the revenue during the same financial year or even in the subsequent year, as per the relaxation available in the proviso to Section 40(a)(ia) of the Act but, the appellant simply avoided his obligation and attempted to suggest that it had no liability to deduct the tax at source at all. Such an approach of the appellant, when standing at conflict with law, the consequence of disallowance under section 40(a)(ia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for carrying out any work), 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,- (A) in a case where the tax was deductible and was so deducted during the last month of the previous year, on or before the due date specified in sub-section (1) of section 139; or (B) in any other case, on or before the last day of the previous year: Provided that where in respect of any such sum, tax has been deducted in any subsequent year or, has been deducted (A) during the last month of the previous year but paid after the said due date; or (B) during any other month of the previous year but paid after the end of the said previous year, such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. ** ** ** (ii) After the amendment by Finance Act, 2010 40. Amounts not deductible.-Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head Profits and gains of business or profession ,- (a) in the case of any assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act of 2014 was specifically made applicable w.e.f. 1-4-2015 and clearly represents the will of the legislature as to what is to be deducted or what percentage of deduction is not to be allowed for a particular eventuality, from the assessment year 2015-2016. 19.3 On the other hand, in the case of Calcutta Export Company (supra), this Court noticed the aforesaid two amendments to Section 40(a)(ia) of the Act by the Finance Act, 2008 and by the Finance Act, 2010, which were intended to deal with procedural hardship likely to be faced by the bonafide tax payer, who had deducted tax at source but could not make deposit within the prescribed time so as to claim deduction. In paragraph 17 of judgment in Calcutta Export Company, this Court took note of the case of genuine hardship, particularly of the assessees who had deducted tax at source in the last month of previous year; and observed in paragraph 18 that the said amendment of the year 2008 was brought about with a view to mitigate such hardship. After reproducing the said amendment of the year 2008 and after noticing its retrospective operation, this Court delved into the position obtaining after 2008, where still remained one ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee could not claim deduction for the TDS amount in the previous year in which the tax was deducted and the benefit of such deductions can be claimed in the next year only. 21. The amendment though has addressed the concerns of the assesses falling in the first category but with regard to the case falling in the second category, it was still resulting into unintended consequences and causing grave and genuine hardships to the assesses 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 section 139(1) of the Income-tax Act. The disability to claim deductions on account of such lately credited sum of TDS in assessment of the previous year in which it was deducted, was detrimental to the small traders who may not be in a position to bear the burden of such disallowance in the present assessment year. 22. In order to remedy this position and to remove hardships which were being caused to the assessees belonging to such second category, amendments have been made in the provisions of section 40(a) (ia) by the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive operation, i.e., from the date of insertion of the said provision. 19.5 A bare look at the extraction aforesaid makes it clear that what this Court has held as regards retrospective operation is that the amendment of the year 2010, being curative in nature, would be applicable from the date of insertion of the provision in question i.e., sub-clause (ia) of Section 40(a) of the Act. This being the position, it is difficult to find any substance in the argument that the principles 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 ₹ 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 bonafide asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessity of disallowance comes into operation only when default of the nature specified in the provisions takes place. Looking to the object of these provisions, the suggestions about prejudice or hardship carry no meaning at all. Secondly, as noticed, by way of the proviso as originally inserted and its amendments in the years 2008 and 2010, requisite relief to a bonafide tax payer who had collected TDS but could not deposit within time before submission of the return was also provided; and as regards the amendment of 2010, this Court ruled it to be retrospective in operation. The proviso so amended, obviously, safeguarded the interest of a bonafide assessee who had made the deduction as required and had paid the same to the revenue. The appellant having failed to avail the benefit of such relaxation too, cannot now raise a grievance of alleged hardship. Thirdly, as noticed, the appellant had shown total payments in Truck Freight Account at ₹ 1,37,71,206/- and total receipts from the company at ₹ 1,43,90,632/-. What has been disallowed is that amount of ₹ 57,11,625/- on which the appellant failed to deduct the tax at source and not the entire amount received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance made by the AO u/s.43B of the Act. During the course of assessment proceedings, the assessee could not produce the challan copy of ₹ 1,15,570/-. On perusal of the assessment order, we noticed that these payments relates to the arrears from 2007-2008 but here it is not yearwise breakup that how much amount is relating to which year along with proof of payments. Therefore, this matter is sent back to the file of AO for determination of the yearwise breakup along with the payments and decide the issue as per the provisions of Section 43B of the Act. This ground of appeal of the assessee is allowed for statistical purposes. 10. Ground No.7 relates to disallowance made by the AO for gratuity to staff of ₹ 2,70,000/-. This has been disallowed by the AO referring to Section 36(1)(v) of the Act and confirmed by the CIT(A). In this regard, the assessee has submitted that it has been paid as per the direction of the Reserve Bank of India but before us the ld. AR of the assessee has not produce any documentary evidences, therefore, this matter is also sent back to the file of AO for verification as to whether it has been paid within the due date to the approved gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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