9911796707
TMI Blog2016 (11) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... right in holding that amendment introduced by the Finance Act, 2010 in section 40(a)(ia) is having retrospective effect. 2. The appellant prays that the order of the AO should be restored and order of the CIT(A) should be set aside". 3. The brief facts of the case are that the assessee has filed return of income for the impugned assessment year 2007-08 on 28th October, 2007 which was processed u/s 143(1) of the Act and later on assessment was framed u/s 143(3) of the Act vide orders dated 01-12-2009 accepting the returned income of Rs. 3,83,20,550/-. Thereafter, the case was reopened by the AO u/s. 147 of the Act on the ground, inter alia, that the assessee has deducted tax at source on amount of Rs. 1,29,63,647/- paid for contractors, brokerage, and professional fees and tax was required to be deposited to the credit of Government Treasury before 31st March, 2007 but since the assessee had deposited the tax at source only after expiry of the financial year, hence, disallowance of the amount was required to be made u/s 40(1)(ia) of the Act. Notice u/s 148 of the Act was issued on 21st February, 2012 which was served upon the assessee. The assessee, in response, submitted that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... March, 2007. The A.O. relied on the then existing provisions of section 40(a)(ia) of the Act which is reproduced as under:- "(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-contractors, 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] (A) in a case where the tax was deductible and was so deducted during the last month of the previous year, or or before the due date specified in sub-section (1) of section 139; or (B) in any other case, on or before the last day of the previous year:]" The A.O. observed that as per the un-amended provisions of Section 40(a)(ia), the TDS which has been deducted for payments made during the year for the first eleven months should have been deposited to the credit of Central Government account before the end of the financial year i.e. 31st March, 2007 which the assessee has failed to comply as per the un-amended provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned that no new facts have come to the possession of the A.O. whereby it can be concluded that the income has escaped assessment and it is only from the facts on record that the AO came to the conclusion that the income has escaped assessment which is merely a change of opinion. The assessee relied upon the following decisions:- 1. CIT v. Kelvinator of India Ltd., 256 ITR 1 (Affirmed by Hon'ble Supreme Court in 320 ITR 561 (SC)). 2. Asian Paints Ltd. v. DCIT,(2009) 308 ITR 195 (Bom) 3. NDT Systems v. ITO, 255 CTR 113 (Bom) The ld. CIT(A) rejected the contentions of the assessee on the ground that the A.O. clearly recorded that the assessee has deducted TDS on amount of Rs. 1,29,63,647/- paid for contractors , professionals and brokerage in the first eleven months of the financial year 2006-07 and tax deducted at source on the said payment of Rs. 1,29,63,647/- was required to be deposited before 31st March, 2007 and since the same was deposited only after the expiry of financial year although before the due date of filing of return u/s. 139(1) of the Act, the A.O. disallowed the same u/s 40(a)(ia) of the Act as existing in the statute at that relevant time. The learned CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on various dates before the due date for filing the return as per provisions of section 139(1) of the Act which is reflected in the chart given in the assessment order which has been reproduced in preceding para's of this order. The assessee contended that undisputedly the entire TDS amount have been deposited before the due date of filing return of income u/s 139(1) of the Act and hence no disallowance is required to be made u/s 40(a)(ia) of the Act. The assessee in this regard relied upon the decision of Hon'ble Calcutta High Court in the case of CIT v. Virgin Creations (GA 3200/2011) dated 23.11.2011 whereby the amendment made to section 40(a)(ia) of the Act by Finance Act 2010 were held to be retrospective. The assessee also submitted that the Mumbai Tribunal in the case of Piyush C. Mehta v. ACIT (2012) 52 SOT 27 (Mumbai) considered the decision of the Special Bench in the case of Bharati Shipyard(supra) holding that the amendment by Finance Act , 2010 to Section 40(a)(ia) of the Act to be prospective and also decision of Hon'ble Calcutta High Court in the case of Virgin Creations(supra) holding the same to be retrospective , and the Mumbai Tribunal in Piyush C. Mehta(supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s(supa) and followed the decision of Hon'ble Calcutta High Court in Virgin Creation(supra) being higher judicial forum decision to hold that amendment by Finance Act , 2010 to the provisions of Section 40(a)(ia) of the Act is retrospective in nature, which decision of Hon'ble Calcutta High Court in the case of Virgin Creations(supra) was also followed by the ITAT Bangalore Bench in the case of Santosh Kumar Shetty v. ACIT in IT Appeal No. 1194 (Bang) of 2012 for the assessment year 2008-09 whereby the appeal of the assessee was allowed. Accordingly, the learned CIT(A) directed the A.O. to delete the disallowance of Rs. 1,29,63,647/- made u/s 40(a)(ia) of the Act as the tax deducted at source was deposited to the credit of Central Government by the assessee before the due date of filing of return of income u/s. 139(1) of the Act , vide appellate order dated 18-08-2014 wherein the assessee appeal was allowed on merits with respect to this ground. 6. Aggrieved by the appellate order dated 18-08-2014 passed by the ld. CIT(A), the Revenue is in appeal before the Tribunal. 7. The ld. D.R. submitted that amendment to section 40(a)(ia) of the Act by Finance Act 2010 is prospective in nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come u/s 139(1) of the Act. It is an undisputed position that the assessee has duly paid the taxes deducted at source under Chapter XVII-B of the Act during the first eleven months of the financial year ended 31-03-2007 before the due date of filing of return u/s. 139(1) of the Act . Section 40(a)(ia) was amended by Finance Act, 2010 whereby under the amended provisions, the tax deducted at source under Chapter XVII-B of the Act if paid to the credit of Central government before the due date of filing of return u/s 139(1) of the Act, no disallowance u/s. 40(a)(ia) of the Act is called for . The decisions relied upon by the assessee supports the claim of the assessee, we hold that the assessee having made payment of tax deducted at source in the first eleven month of financial year ending 31-03-2007 to the credit Central Government before the due date of filing of return of income u/s. 139(1) of the Act, no disallowance can be made u/s 40(a)(ia) of the Act and accordingly we delete the disallowance made by the A.O. by holding that the amendment made by the Finance Act, 2010 to Section 40(a)(ia) of the Act is retrospective as held in the decisions relied upon by the assessee and cite ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
