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2024 (4) TMI 353 - AT - Income TaxApplication u/s 154 - benefit of the second proviso to Section 40(a)(ia) - seeking rectification to the effect that the disallowance u/s 40(a)(ia) on payment made without deduction of tax at source be allowed in terms of the second proviso to Section 40(a)(ia) which proviso undeniably was brought on the statute much after the impugned assessment year before us - HELD THAT:- Assessee has demonstrated before us that the in the case of Arvind Lifestyle Brands Ltd. [2018 (8) TMI 1714 - ITAT AHMEDABAD] had categorically held that the said amendment/second proviso to Section 40(a)(ia) to have retrospective effect, finding it to be curative in nature. The Revenue has not controverted this position of law as laid down by the Hon’ble jurisdictional High Court. The law as interpreted by the Hon’ble High court has binding force within its jurisdiction and is the final word on law in its particular jurisdiction until overturned by a contrary decision of the hon’ble apex court. Therefore, the decision of the Hon’ble jurisdictional High Court in the case of Arvind Lifestyle Brands Ltd. (supra), holding second proviso to Section 40(a)(ia) of the Act to have retrospective effect, was the interpretation of law in the jurisdiction of Gujarat as it always was. The assessee was well within its right to have sought the benefit of this second proviso for the impugned year, i.e. AY 2005-06 as it was applicable for the impugned year also as per the decision of the Hon’ble jurisdictional High Court. The application, therefore, filed by the assessee seeking the benefit of the second proviso, therefore, clearly pointed out a mistake which was apparent from record on account of the denial of benefit of the said proviso to the assessee. As rightly pointed out by assessee, courts have repeatedly held that if an assessee under a mistake/misconception is over-assessed, the authorities under the Act are required to assist him and ensure that only the legitimate taxes due are collected, S.R Koshti [2004 (12) TMI 62 - GUJARAT HIGH COURT] - The application, therefore, filed by the assessee u/s 154 of the Act seeking the benefit of the second proviso to Section 40(a)(ia) of the Act, needed to be entertained and allowed since the assessee had pointed out a mistake apparent from record. As relying on Jigna Construction [2016 (10) TMI 169 - GUJARAT HIGH COURT] we hold the application filed by the assessee is maintainable u/s 154 of the Act and restore the issue back to the AO to consider the same on merits regarding the quantum of the benefit allowable to the assessee under the second proviso to Section 40(a)(ia) of the Act. Decided in favour of assessee.
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