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2016 (11) TMI 1632 - HC - Income TaxRectification of mistake u/s 154 - disallowance u/s 40a(ia) - HELD THAT:- We can point it out that this Court in the case of Piu Ghosh [2016 (8) TMI 99 - CALCUTTA HIGH COURT] held that “that the Finance (No.2) Act, 2004 got Presidential assent on September 10, 2004. The assessee could not have foreseen prior to that date that any amount paid to a contractor without deducting tax at source was likely to become not deductible u/s 40. It could not be assumed that the Legislature was not aware or did not foresee this predicament. The Legislature therefore provided that the Act shall become operative on April 1, 2005. Section 11 of the Finance (No.2) Act, 2004 by which sub-clause (ia) had been added to section 40, 1961 did not provide that it was to become effective from the assessment year 2005-06. It had merely said that it was to become effective on April 1, 2005, which should have been meant to refer to the financial year. There was no scope for ambiguity or confusion. The Tribunal had erred in applying the provision of section 40(a)(ia) of the Income-tax Act, 1961 in disallowing the payment made to a contractor without deducting tax at source during the financial year 2004-05, corresponding to assessment year 2005-06. The appeal, as such, is admitted. The question is answered in the negative and in favour of the assessee
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