TMI Blog2015 (8) TMI 232X X X X Extracts X X X X X X X X Extracts X X X X ..... ure. The tribunal committed an error in holding it as prospective. The substantial questions of law is answered in favour of the assessee and against the revenue. - Income Tax Appeal No.590/2013 Income Tax Appeal Nos.333/2012, 457/2013, 319/2009, 242/2012, 334/2012, 12/2013 and 595/2013 - - - Dated:- 15-7-2014 - N. Kumar And B. Manohar, JJ. For the Appellant : Sri Kamaladhar G, Adv. For the Respondent : Sri S Parthasarathi, Adv. JUDGMENT These appeals are filed by the Revenue challenging the order passed by the tribunal. 2. The same questions of law are involved in all these appeals, therefore, all are taken up together and disposed of in this common judgment. 3. The substantial questions of law that arise for consideration in all these appeals is whether, the amendment to Section 40(a)(ia) by the Finance Act, 2010, which is given effect from 01.04.2010 is retrospective in nature. 4. Prior to the amendment, the said provision read as under:- Section 40(a)(ia) : any interest, commission or brokerage, rent, royalty fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after the end of the said previous year, Such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid. 5. The argument of the Revenue is, when the Finance Act, 2010, expressly states that the said provision would come into effect from 01.04.2010, it is not permissible for the Tribunals or the Courts to give it a retrospective effect prior to the date and therefore, it is submitted that the order passed by the Tribunal holding it as retrospective notwithstanding the fact that the parliament made its intention clear by declaring that it comes into effect from 01.04.2010. Therefore, the impugned orders are liable to be set aside. 6. This question came up for consideration before the Gujarat High Court in the case of Commissioner of Income Tax, Ahmedabad IV Vs. Om Prakash R Chaudhary in Tax Appeal Nos.412/2013 and connected matter, which came to be decided on 22.11.2013, after referring to the judgments of Allied Motors (P.) Ltd. Vs. CIT reported in AIR 1997 SC 1361 and CIT Vs. Alom Extrusions Limited reported in (2009) 319 ITR 306 has held as under: 15.4: Thus, considering relevant legislative changes made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Chapter IV of the computation of business income . 16.3: Thereafter, by way of amendment of Finance Act, 2008, further amendment was made whereby TDS deductible and deducted in the last month of previous year if was not paid till the due date of filing of return under sub-section (1) of Section 139 and in any other case, on or before the last day of the previous year, Section 40(a)(ia) provided for the disallowance of expenses like interest, commission, brokerage, etc. 16.4: Since, this had created anomaly, whereby tax deducted in the last month was permitted payment till filing of return as per sub-section (1) of Section 139 whereas for the TDS deducted during the rest of the months, period was provided only till 31st March of the previous year, Finance Act, 2010 was brought. To bring parity, to remedy unintended consequences and to make the provision workable, it proposed to amend the said provision and provided inter alia that no disallowance would be made if after deduction of tax during the previous year, the same has been paid on or before the due date of filing of return of income as specified in sub-section (1) of Section 139. This has been given retrospective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hroughout the year, time is extended from payment till the filing of return. It is thus apparent that when the amendment introduced by the Finance Act, 2008 of relaxing the time for deposit of TDS was made retrospective from the year 2005 [1st April 2005], the amendment by Finance Act 2010 with regard to other limb of time limit for payment of TDS has to be held retrospective not from 1st April 2010 only. If we recall at this stage the speech of Finance Minister while introducing this provision by way of Finance Act, 2010, this amendment essentially has been brought for relaxing the current provision on disallowance of expenditure. The tax, if is deducted at any time during the financial year and paid before the date of filing of the return, the Legislature intended to allow deduction on such expenditure with an intention to permit additional time for most deductors upto September of the next financial year. 17.1: We draw further support from the fact that the rigor of payment of interest is also enhanced by increasing the interest charged on tax deducted, if any deposit by the specified date i.e., up to the filing of the return is not made, from 12% to 18% per annum in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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