TMI Blog2016 (8) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... perative on 1st April, 2005. Any other interpretation shall amount to “punishing the assessee for no fault of his” following the judgment in the case of Hindusthan Elector Graphites Ltd. [2000 (3) TMI 2 - SUPREME Court ]. On the top of that, Section 4 relied upon by Mr.Agarwal merely provides for an enactment as regards rate of tax to be charged in any particular assessment year which has no application to the case before us. Section 11 of the Finance Act by which Clause (ia) was added to Section 40 of the Income Tax Act does not provide that the same was to become effective from the assessment year 2005-06. It merely says it shall become effective on 1st April, 2005 which for reasons already discussed should mean to refer to the financi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eemed to have come into force on the 1st day of April, 2004. By section 11 of the aforesaid Act, Clause (ia) was added to Section 40 of the Income Tax Act. Section 40 provides for the amounts not deductible. To the long list of not deductible amounts , an addition was made by Clause (ia) which reads as follows: (ia) any interest, commission or brokerage, fees for professional services or fees for technical services payable to a resident, or amounts payable to a contractor or subcontractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid during the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent year 1989-90 was filed by the assessee in December, 1989. The Finance Bill, 1990 got presidential assent on 31st May, 1990 and was made applicable retrospectively with effect from 1st April, 1967. By the amendment cash assistance was made taxable. Since the assessee who had received cash assistance from the Government and had not offered the amount for taxation, the assessing officer treated the amount of cash assistance as an additional income under section 143(1)(A) and levied the amount of tax at a higher rate and also charged consequential interest. The Tribunal reversed that order. The High Court upheld that order. In an appeal, the Supreme Court held as follows : If additional tax could be levied in such circumstances, it wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons (including provisions for the levy of additional income-tax) of, this Act ] in respect of the total income of the previous year [ *** ] of every person: Provided that where by virtue of any provision of this Act income-tax is to be charged in respect of the income of a period other than the previous year, income-tax shall be charged accordingly. (2) In respect of income chargeable under sub-section (1), income-tax shall be deducted at the source or paid in advance, where it is so deductible or payable under any provision of this Act. Mr.Agarwal s criticism is not without force but he has not been able to point out as to how could the assessee have come to know that the omission to deduct tax from any payment made to a contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, law in that regard was noticed by the Supreme court in the case of CIT (Central)-I vs. Vatika Township Pvt.Ltd., reported in (2014) 367 ITR 466 (SC), as follows : Tax laws are clearly in derogation of personal rights and property interests and are, therefore, subject to strict construction, and any ambiguity must be resolved against imposition of the tax. In Billings v. U.S. (232 U.S. 261, S.Ct. 421 (1914)), the Supreme Court clearly acknowledged this basic and longstanding rule of statutory construction : Tax Statutes should be strictly construed, and, if any ambiguity be found to exist, it must be resolved in favor of the citizen. Eidman v. Martinez, 184 U.S. 578, 583; United States v. Wigglesworth, 2 Story, 369, 374; Mu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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