TMI Blog2015 (7) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... sited, the amount on which deduction was made is allowed as an expenditure incurred in the previous year in which the payment of tax deducted at source is made. Thus, it results in shifting of the year in which the expenditure can be claimed, even if payment has been made to the recipient and is to be allowed as expenditure in another year. The principle of matching, i.e., matching of receipts with expenditure to the extent indicated in section 40(a)(ia), therefore, gets affected. The provision can work harshly and may be very stringent in some cases. The legislative purpose and the object is to ensure payment and deposit of tax deducted at source with the Government. Tax deducted at source results in collection of tax.The amended provisions are clear and free from any ambiguity and doubt. They will help curtail litigation. The amended provision clearly support the expression “said due date” used in clause A of proviso to unamended section refers to time specified in Section 139(1) of the Act. The amended section 40(a)(ia) expands and further liberalises the statue when it stipulates that deductions made in the first eleven months of the previous year but paid before the due date o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2010-11. (5) The C.I.T.(A) erred in not appreciating that the Addl. CIT-V started the assessment Proceedings much late ,and due to paucity of time at his disposal to complete the assessment, did not to allow the appellant further time to submit the year wise bifurcation of TDS payments, through composite common challans and therefore, such details submitted as additional evidences at appeal stage ought to have been accepted by him. (6) The C.I.T. (A) erred in simply relying on the Remand Report without looking in the case records of the AO to verify whether the evidences submitted as additional evidences were in fact not in the assessment records. (7) The C.I.T. (A) erred in not appreciating that the appellant deducted TDS before the year end from the provision made for relevant expenses and paid the TDS in various installment before due date for filing the Return of Income i.e. 30th Sept., 2009, and the Auditors Report was erroneous to that extent. (8) The C.I.T. (A) erred in not appreciating that amendment in Sec.40(a)(ia) in 1. Tax Act, 1961 made by Finance Act, 2010 has retrospective effect. 3. The appellant craves leave to alter, amend, expand or change the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l evidence submitted by the assessee in form of the sanction letter of the Central government. After considering the remand report, dated 11.02.11,the FAA held that the provisions of section 309(5A) and 309(5B) of the Companies Act were applicable to the case under consideration that the assessee was not entitled to get deduction of the excessive remuneration paid, that the excessive remuneration was not allowable u/s. 37(1) of the Act, that it was paid over and above the prescribed limits of the Companies Act. He confirmed the disallowance made by AO. 8. Before us, the AR argued that the Central government had allowed payment of excess remuneration to the Directors that sanction letter was made available to the FAA, that provisions of Explanation to section 37(1) were not applicable with regard to the payment. He referred to the page no.38 of the paper book. He also relied upon the order of the Tribunal delivered for the year 2001-02 to 2004-05 wherein alleged excessive remuneration to the Directors disallowed u/s. 40A (2) (b)of the was deleted. DR supported the order of the FAA. 9. We have heard the rival submissions and perused the material before us. We find that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id at source was not possible. He referred to page no.26-29 and 65 of the paper book. He relied upon the case of Naresh Kumar(362ITR562)of Hon'ble Delhi High Court. Departmental Representative(DR)supported the order of the FAA. 7. We have heard the rival submissions and perused the material before us. We find that the assessee had filed additional evidences, that same were not admitted by the F AA, that the assessee had filed composite certificate of deducting taxes. It is found that Hon'ble Delhi High Court has in the matter of Naresh Kumar(supra) has held that the proviso was applicable with retrospective effect. Following is the decision of the Hon'ble Court: Provisions relating to deduction of tax at source are important as this ensures that tax so deducted gets deposited with the Government and non-taxpayers/filers can be identified. The deductees do not suffer and are not deprived of credit of deduction made from their income. Section 40(a)(ia) of the Income-tax Act, 1961is a provision incorporated with that objective and purpose in mind. It is not basically a penal provision as when the tax deducted at source is deposited, the amount on which deduction was mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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