TMI Blog2014 (9) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent. JUDGMENT Dr. Manjula Chellur, CJ. - The substantial questions of law that arise for our consideration in this appeal are as under: (i) Whether on the facts and circumstances of the case, the Hon'ble Tribunal was justified in upholding the decision of the Assessing Officer invoking the provisions of Section 40(a)(ia) against the appellant, for the revenue expenditure which are the allowable deductions under Section 28(i) of the Income Tax Act? (ii) Whether in the facts and circumstances of the case, the Hon'ble Tribunal is justified in upholding the order issued by the assessing authority invoking Section 40 (a)(ia) against the appellant, in the light of the provisos to Section 40 of the Income Tax Act, added w.e.f. 01.04.2005 and substituted w.e.f. 01.04.2010. 2. In brief, the facts that led to filing of this appeal are as under: Appellant is a partnership firm engaged in advertisement business. The controversy before us pertains to assessment year 2008-09. According to appellant/ assessee, for this assessment year, on account of unexpected administrative exigencies, delay occurred in filing the returns within the stipulated time, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted tax at source as stipulated under Chapter XVIIB of the Act and remitted the above amount to the Government account with late fee as stipulated in the Act and Rules. This has not resulted in any loss to revenue of the nation. Before all the authorities, revenue admitted the deduction at source made by the appellant/assessee and the error is such amount was remitted to the Government account with late fee as stipulated in the Act. The delay in filing the return by the assessee in that particular year was beyond their control. 5. Appellant/assessee also contends that the proviso introduced to Section 40 with effect from the assessment year 2012-13 clarifies the situation that where an assessee fails to deduct the whole or any part of the tax in accordance with the provisions of Chapter XVII-B on any such sum, but is not deemed to be an assessee in default under first proviso to Section 201(1), thus for the purpose of this sub clause, it shall be deemed that assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso. The first proviso to Section 201(1) was also amended which clarifies the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has recorded in the impugned judgment dated 03.03.2009 that the counsel agreed with instructions from the plaintiff and reiterated this fact in its order dated 28.08.2009 in Misc.Civil No. 13474 of 2009 in the above-mentioned RFA while rejecting the plea of the counsel for the appellant herein that he did not give consent that he had no instructions from his clients. A concession made by a counsel on a question of fact is binding on the client, but if it is on a question of law, it is not binding.[vide: Nedunuri Kameswaramma v. Sampati Subba Rao and Anr. [1963] 2 SCR 208, 225 : (AIR 1963 SC 884), B.S. Bajwa and Anr. v. State of Punjab and Ors. [1998] 2 SCC 523, 525-526] : (AIR 1999 SC 1510 : 1999 Lab IC 229) . 7. From paragraphs 11 and 12 extracted above it is clear, if consent is given on question of fact by counsel, it is binding. If consent is given on question of law, it is not binding. It is contended on behalf of appellant that order of Tribunal is without considering legal issues, therefore, it is cryptic and non speaking order without touching legal issues. 8. Revenue approached Tribunal aggrieved by order of deletion of disallowance made under Section 40(a)(ai) of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before, then if another construction is possible apart from strict literal construction, then that construction should be preferred to the strict literal construction. Though equity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in injustice, then such construction should be preferred to the literal construction. 11. Allied Motors (P) Ltd. v. Commissioner of Income-Tax ((1997) 224 ITR 677 (SC)) is also with reference to reasonable construction of provisions. Here, ITA 310/13 12. Rajendra Singh Verma v. Lieutenant Governor (NCT of Delhi) [2011] 10 SCC 1 is relied upon to contend that in an extraordinary case when the Court is convinced that some real injustice has happened, which ought not to have taken place, has really happened and not merely because there could be any possible view, in such cases judicial review has to be exercised. 13. In a case where Advocate General gives concession before court to grant benefit of an earlier date of appointment to an employee and if such concession is on point of law, it does not bind State Government or other employee. In this regard, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; or 'Payable', the legislature used the word very carefully in s.40(a)(ia) and in all its wisdom at the time of incorporating the section by way of Finance (No.2) Bill, 2004. It was inserted in s.40(a)(ia) that the amount payable to contractor or sub-contractor liable for disallowance, its TDS not deducted. Sec.40(a)(ia) has to be subjected to strict interpretation. Going by the rule of strict interpretation the default with reference to actual 'payment' of expenditure would not entail disallowance. This is because, the language used in the s.40(a)(ia) is very simple, clear and unambiguous. Literal rule of interpretation has to be applied. The speech of Finance Minister or even other provisions of the Act can be pressed into service if there is some ambiguity about the meaning of the section. But the same was not the case in the instant case. Even the principles of liberal interpretation cannot be applied where the language is clear, simple, and the meaning of the word is apparent. As such, the provisions of s.40(a)(ia) are not applicable in the present facts of the case. The disallowance if any required to be made shall be restricted to the extent of payable sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e would apply retrospectively w.e.f. 1st April, 2005. In the case of R.B. Jodha Mal Kuthiala 82 ITR 570, it was held by the Hon'ble Supreme Court that a proviso which is inserted to remedy unintended consequences and to make the provision workable, requires to be treated as retrospective in operation so that a reasonable interpretation can be given to the section as a whole. In the present case, the amount of tax deducted at source from the freight charges during the period 01/04/2005 to 28/02/2006 was paid by the assessee in the months of July and August 2006 i.e well before the due date of filing of its return of income for the year under consideration. This being the undisputed position, we hold that the disallowance made by the A.O and confirmed by the learned CIT(A) on account of freight charges by invoking the provisions of section 40(a)(ia) is not sustainable as per the amendments made in the said provisions by the Finance Act, 2010 which, being remedial/curative in nature, have retrospective application. Accordingly, we delete the said disallowance and allow ground No.2 of this appeal. 16. In the present case, Tribunal, without applying its mind whether CIT (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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