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PR. COMMISSIONER OF INCOME TAX-VADODARA-1 Versus M/s. JIGNA CONSTRUCTION

2016 (10) TMI 169 - GUJARAT HIGH COURT

Disallowance u/s 40(a)(ia) - tax deducted at source not deposited within the time allowed - assessee preferred a revision petition before the Commissioner under Section 264 wherein he did not grant the benefit of the deduction to the assessee during such assessment year provided directed the Assessing Officer to make necessary rectification in exercise of powers under Section 154 of the Act for the relevant years and give effect to the expenses so disallowed in the earlier year. - Held that: .....

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URT). On the basis of such statutory change and the judgement of the High Court, the assessee was, as held by the Supreme Court in case of Assistant Commissioner of Income Tax vs. Saurashtra Kutch Stock Exchange Limited reported in [2008 (9) TMI 11 - SUPREME COURT ], entitled to seek rectification. The Tribunal correctly granted such a relief which was denied by the Assessing Officer and Commissioner (Appeals). The Commissioner (Appeals) was not correct in holding that no appeal against the orde .....

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pugned judgement, has made sufficient provision for withdrawal of the benefit of the expenditure in the later years if by virtue of the order of the Commissioner under Section 264 of the Act the same was already granted to the assessee. This direction the assessee has not challenged. Before us also no such request is made. The direction of the Tribunal, therefore, binds the assessee. - TAX APPEAL NO. 209 of 2016 - Dated:- 27-9-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE APPELLANT : .....

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ges. The Assessing Officer, while passing order of assessment dated 15.12.2009 recorded that the tax deducted at source concerning these payments was deposited in the government account only on 05.05.2007. In his opinion therefore, since the assessee failed to deposit the tax deducted at source within the time allowed under the Income Tax Act,1961 ['the Act' for short], the expenditure would have to be disallowed in terms of Section 40(a)(ia) of the Act. He accordingly, disallowed such e .....

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cer to make necessary rectification in exercise of powers under Section 154 of the Act for the relevant years and give effect to the expenses so disallowed in the earlier year. 4. Section 40(a)(ia) of the Act was amended by amendment dated 01.04.2010 by virtue of which if the tax deducted at source is deposited in the government account before the due date of filing the return, the deduction would still be available in the year of payment. This amendment came up for consideration before the Divi .....

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ought rectification of the order of assessment. In essence, the assessee requested the Assessing Officer to grant the benefit of the expenditure for the assessment year 2007-08 itself. The Assessing Officer having rejected such an application, the assessee preferred appeal before the Commissioner (Appeals). The Commissioner (Appeals) by his order dated 06.08.2014 rejected such an appeal on the ground that the Assessing Officer had passed an order under Section 154 read with Section 264 and such .....

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that such amendment was held to be retrospective in nature by the High Court. The Tribunal also noted that the directions issued by the Commissioner in order under Section 264 of the Act to give benefit of this expenditure in the later years but suggested that such benefits can be withdrawn while giving effect to the directions of the Tribunal. In this context, after referring to the directions of the Commissioner in his order dated 11.08.2010 under Section 264 of the Act, the Tribunal observed .....

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ment year. As a corollary thereto, the said deduction cannot be allowed in any other assessment year. Sec. 153(3) of the IT Act, 1961 provides that the provisions of Sections 153(1) and (2) (i.e. the provision laying down the time limit within which assessments, reassessments or recomputations can be done) shall not apply to, inter alia, the classes of assessments, reassessments and recomputations which may be completed at any time where the assessment, reassessment or recomputatin is made on th .....

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quent assessment year. 7. It is this judgement of the Tribunal which the Revenue has challenged. In our opinion, the Tribunal committed no error. As noted, admitted facts are that the assessee having deducted tax at source deposited in the government only after the end of the year under consideration but before the due date for filing of the return. In view of the amended provision of Section 40(a)(ia) of the Act by virtue of amendment dated 01.04.2010, such expenditure would also be deductible .....

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