TMI Blog2022 (1) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... opportunity to furnish the requisite certificates from the respective parties and where the certificates are so furnished by the assessee containing the requisite information, allow the necessary relief to the assessee. The alternate contention is therefore not considered and left open. The matter is accordingly set-aside to the file of the Assessing officer for the limited purposes of examining and considering the certificates which shall be furnished by the assessee within reasonable period of time as so specified by the Assessing officer. Appeal of the assessee is allowed for statistical purposes. - ITA No. 171/Chd/2020 - - - Dated:- 20-12-2021 - Sudhanshu Srivastava, Member (J) And Vikram Singh Yadav, Member (A) For the Appellant : Parikshit Aggarwal, CA For the Respondents : Ashok Khanna, Addl. CIT ORDER Per Vikram Singh Yadav , Accountant Member This is an appeal filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals)-3 [in short the 'Ld. CIT(A)'], Ludhiana dated 15.11.2018 wherein the assessee has taken many grounds of appeal which effectively relate to challenging the order of the Ld. CIT(A) in confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee therefore becomes relevant to determine whether the same reflects sufficient cause on his part in not presenting the present appeal within the prescribed time. In the instant case, it has been contended by the ld. AR and as also stated in the affidavit so submitted by the assessee that the assessee was under a belief that the appeal was filed by his Counsel, however, later on, on receipt of communication from the AO regarding initiation of penalty proceedings, he enquired and came to know that the Counsel has been diagnosed with brain tumor and his health continues to be bad and due to ill-health of the Counsel, the appeal was not filed. It has been further stated that the assessee engaged another Counsel to prepare and file the present appeal which was thereafter filed within a period of 10 days of appointment of the new Counsel. The contents of the affidavit have not been disputed by the Revenue. We therefore find that there is no culpable negligence or mala fide on the part of the assessee in delayed filing of the present appeal and he was under the bona fide belief that the appeal has been filed by his Counsel who has been engaged for the purposes of filing and argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d no interest is outstanding as payable as on the year end and, therefore, the provisions of section 40(a)(ia) of the Act are not applicable. 6. The reply so filed by the assessee was not found acceptable to the AO. As per the AO, the matter is squarely covered by the decision of the Hon'ble Punjab Haryana High Court in the case of P.M.S. Diesel Vs. CIT 374 ITR 562 wherein it has been held that the term 'payable' is descriptive of the payment which attract the liability to deduct tax at source and it does not categorize default on the basis when the payments are actually made to the payee which attract liability to deduct tax at source. Accordingly, the AO made an addition of ₹ 48,19,477/- by invoking the provisions of section 40(a)(ia) of the Act. 7. Being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A). It was contended before the Ld. CIT(A) that there has been an amendment by the Finance Act, 2012 to the provisions of section 201(1) of the Act as well section 40(a)(ia) of the Act by virtue of which where the assessee furnishes certificate in the requisite format that the payee has taken into account such sum for computing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year under consideration is assessment year 2013-14 and amendment is clearly applicable in the impugned assessment year. It was submitted that the payee entities are known NBFCs and it is unlikely that they have not filed their respective returns of income and have not included the impugned payments and paid taxes thereon. It was accordingly submitted that the assessee may be allowed one more opportunity to submit the requisite certificates and in the alternate, the AO is well empowered to call for the information from the payees and the matter may thus be set-aside to the file of the AO to verify the same. 9A. Alternatively, it was contended that by virtue of the amendment in section 40(a)(ia) brought in by the Finance Act, 2014, only 30% of any sum payable to a resident on which tax is deductible at source and such tax has not been deducted or after deduction has not been paid on or before due date specified in section 139(1) of the Act can be disallowed. It was submitted that by virtue of the said amendment, only 30% of the sum payable can be disallowed instead of 100% as done by the AO. It was submitted that though the said amendment has been brought in w.e.f. 0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave to be treated as prospective unless the legislative intent is clearly to give the enactment a retrospective effect. However, if legislation confers a benefit on some persons but without inflicting a corresponding detriment on some other person or on the public generally and where to confer such benefit appears to have been the legislators object, then the presumption would be that such legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. Therefore even in a case it is held that the disallowance u/s. 40(a)(ia) is warranted, same should be restricted to only 30% of the amount of interest paid. 14. It was further submitted that the Hon'ble Supreme Court in case of CIT Vs. Calcutta Export Company (2018) 165 DTR 321/255 Taxman 293 has also held that the purpose of the amendment made to sec. 40(a)(ia) by the Finance Act, 2010 is to remove the anomalies that the section was causing to the bona fide taxpayers and therefore, the amendment being curative in nature is required to be given retrospective operation i.e., from the date of insertion of the said provision w.e.f. AY 2005-06 . This ratio laid down equally applies to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment year 2013-14 and there cannot be any dispute that the aforesaid amendment is applicable in the instant case. It has been contended that the payees are publicly known NBFCs and it is unlikely that they have not considered the payments so made by the assessee while computing their income and filing their respective tax returns and the assessee may be allowed an opportunity to furnish the requisite certificates in support of the same. We find that the legislative mandate so provided by the aforesaid amendment should be allowed to reach its logical conclusion and considering the same and in the interest of substantial justice, we hereby allow the assessee one more opportunity to furnish the requisite certificates from the respective parties and where the certificates are so furnished by the assessee containing the requisite information, allow the necessary relief to the assessee. The alternate contention is therefore not considered and left open. The matter is accordingly set-aside to the file of the Assessing officer for the limited purposes of examining and considering the certificates which shall be furnished by the assessee within reasonable period of time as so specified b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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