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2016 (7) TMI 1661 - AT - Income TaxDisallowance u/s 40(a)(ia) - scope of section 40(a)(ia) as amended by the Finance act, 2012 - retrospectively of law as amended - whether the proviso is applicable from 1.4.2005 or from 01/04/2013 - HELD THAT: As relying onf Ansal Landmark Township Private Ltd. [2015 (9) TMI 79 - DELHI HIGH COURT] we hold that the proviso to the section is applicable from 01.04.2005,that the deductee had paid the taxes on the income that was subject of TDS provisions, that no action could be taken against the assessee making the payment to HL. The basic aim of chapter XVII is to ensure that no portion of income remains untaxed. To ensure it, TDS provisions were introduced-the person making payment was made responsible to deduct tax and pay it with the government account. But, the proviso to section 40(a)(ia)made it clear that if the deductee pays the taxes on the entire income liable for taxation then no action would be taken against the deductor. The proviso is quite logical. It ensures that whole of the taxable income is taxed. Once the specific purpose is served there is no justification to indulge in unnecessary litigation. It is not the case of the AO or the FAA that the deductee had not paid the taxes on the taxable income or that it was not paid within the prescribed time limit. Therefore, reversing the order of the FAA we decide the effective ground of appeal in favour of the assessee.
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