TMI Blog2014 (6) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... been examined by the lower authorities, because they did not have the benefit of the insertion of second proviso to section 40(a)(ia) of the Act by the Finance Act, 2012 w.e.f. 01.04.2013 before them - the matter is restored back to the file of the Assessing Officer with directions to examine contentions of the assessee and decide the same - appeal allowed by way of remand. - ITA No. 2444/PN/2012, C.O. No. 01/PN/2014 (Arising out of ITA No.2444/PN/2012) - - - Dated:- 30-6-2014 - G. S. Pannu (Accountant Member) And R. S. Padvekar (Judicial Member) For the Department : S. P. Walimbe For the Assessee : C. V. Chitale ORDER G. S. Pannu (Accountant Member) The captioned appeal by the Revenue and the Cross-objectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment is towards reimbursement of expenses, Assessing Officer has erred in disallowing such payment. 4. Substantively speaking, in both the appeals the issue revolves around a disallowance of ₹ 1,47,14,023/- made by the Assessing Officer out of transportation charges by invoking section 40(a)(ia) of the Act. The assessee is an individual engaged in the business of transport contracting. The Assessing Officer noticed that out of the total transport charges of ₹ 1,59,70,200/- the provisions of section 194C of the Act were applicable with respect to a sum of ₹ 1,47,14,023/-. With respect to the aforesaid amount the Assessing Officer noted that assessee had failed to deduct the requisite tax as required in terms of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eja vs. ITO vide ITA No.1514/PN/2012 dated 22.10.2013 wherein it has been held that the provisions of section 40(a)(ia) of the Act are applicable even on sums which are outstanding at the close of the year and on which assessee has not deducted and deposited the requisite tax at source. The Tribunal relied upon the judgements of the Hon ble Calcutta High Court in the case of CIT vs. Crescent Export Syndicate (ITAT 20 of 2013) dated 03.04.2013 and that of the Hon ble Gujarat High Court in the case of CIT vs. Sikandar Khan N Tunvar (Tax Appeal No.905 of 2012 others) dated 02.05.2013, which were contrary to the decision of the Special Bench of the Tribunal in the case of Merilyn Shipping and Transport (supra), and held the issue against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fying the retrospective application of the said proviso, it is submitted that it has been inserted to eliminate unintended consequences which may cause undue hardships to the tax payers, and thus it has to be considered as retrospective in operation. In support, analogy has been drawn from the first proviso to section 40(a)(ia) of the Act inserted by the Finance Act, 2012 w.e.f. 01.04.2013, which has been held to be retrospective by the Hon ble Calcutta High Court in the case of CIT vs. Virgin Creations vide ITA No.302/2011 dated 23.11.2011 on the reasoning that it was clarificatory in nature and was introduced by the legislature to eliminate unintended consequences. It has also been pointed out that the Pune Bench of the Tribunal in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer. Accordingly, while we set-aside the order of the CIT(A) allowing part relief to the assessee; however, on the other aspects as aforesaid, the matter is restored back to the file of the Assessing Officer with directions to examine contentions of the assessee and decide the same in accordance with law, ofcourse after affording the assessee necessary opportunity of being heard. In case, the Assessing Officer is satisfied with the contentions of the assessee he shall allow appropriate relief; and, in case he is not satisfied then he shall be at liberty to proceed in accordance with law to make the disallowance u/s 40(a)(ia) of the Act. 10. In the result, the Cross Objection of the assessee is allowed for statistical purposes. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
