TMI Blog2018 (3) TMI 1022X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay the amount of TDS with interest as also subject to the expenses being disallowed. Additional ground urged on the basis of Section 43(2) - Held that:- The term “paid” has been defined as an amount paid or actually incurred and hence in the case of a loss return, even if there is no actual payment, the loss return, which does not raise a liability to pay, has to be liberally construed is the argument. The definition clause is with reference to 'income from profits and gains of business'. By the specific words employed in sub-section(2) of Section 43, this is with reference to the method of accounting; which is either on accrual or receipt. There is no ground raised on the basis of the method of accounting of the assessee, herein and the contention is only to be rejected. The definition clause has nothing to do with Section 201(1) or the determination of an 'assessee in default'. We cannot countenance the further argument of the learned Senior Counsel that the appellant/ assessee should be considered as a charitable educational institution under Section 12AA. Admittedly, the assessee had applied for such registration only in the year 2011-12. The application for cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of the proviso? ( iii) Ought not the Tribunal have found that the assessee, who obtained registration as a charitable educational institution for the assessment year 2011-2012, could be granted the benefit of exemption from payment of income tax in the previous years? 3. One additional question arising in the appeals from the order under Section 201(1), is as follows: Ought not the Tribunal have confined the recovery to the interest payable on the TDS amounts when the resident assessee had filed returns showing the income received by it, by way of lease rent and also computing the taxable income including such amounts; as has been held in Hindustan Cocacola Beverage (P) Ltd. V. Commissioner of Income Tax [(2007) 293 ITR 226 SC]. 4. The learned Senior Counsel Sri. T.M. Sreedharan, appearing for the appellant, would take us through Allied Motors (P) Ltd. V. Commissioner of Income Tax [(1977) 224 ITR 677 (SC)] and Commissioner of Income Tax v. Alom Extrusions Ltd. [(2009) 319 ITR 306 (SC)] to drive home the contention urged that the proviso inserted by Finance Act, 2012 is curative in nature. It is argued that the introduction of the proviso under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns Ltd. (both supra) , the amendments to Section 43B was found to be curative. The learned Senior Counsel for the appellant/assessee relying on the said decisions argued that the amendments made by Finance Act, 2012 on a similar interpretation could be considered to be curative and not merely prospective. We notice that the two Division Benches of this Court had found that Section 40(a) (ia) is not retrospective. If at all, we take a different view, judicial discipline require that we refer the question to a Larger Bench. We do not find any reason so to do, since even if the amendment is found to be curative, the appellant herein will not be enabled such benefit. 7. The applicable provisions are Section 40(a) (ia) and the second proviso thereof and the first proviso to Section 201(1) and we extract below those provisions as it existed in the relevant assessment year. Section 40(a)(ia) as amended by Finance Act, 2008, with retrospective effect from 01.04.2005 is as follows : Section 40 : Amounts not deductible Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computing the income chargeable under the head Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of furnishing of return of income by the resident payee referred to in the said proviso. Section 201(1) as introduced, again by Finance Act, 2010 reads as under : 201. Consequences of failure to deduct or pay (1) Where any person, including the principal officer of a company,-- xxx xxx xxx Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this Chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- ( i) has furnished his return of income under section 139; ( ii)has taken into account such sum for computing income in such return of income; and ( iii) has paid the tax due on the income declared by him in such return of income and the person furnishes a certificate to this effect from an accountant in such form as may be prescribed. 8. As per the first provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liberally construed is the argument. The definition clause is with reference to 'income from profits and gains of business'. By the specific words employed in sub-section(2) of Section 43, this is with reference to the method of accounting; which is either on accrual or receipt. There is no ground raised on the basis of the method of accounting of the assessee, herein and the contention is only to be rejected. The definition clause has nothing to do with Section 201(1) or the determination of an 'assessee in default'. 11. We cannot countenance the further argument of the learned Senior Counsel that the appellant/ assessee should be considered as a charitable educational institution under Section 12AA. Admittedly, the assessee had applied for such registration only in the year 2011-12. The application for condonation of delay for the previous years stood rejected. There is no question of any exemption allowed in a year in which such registration was not available; especially by this Court exercising jurisdiction under Section 260A of the I.T. Act. 12. We, hence, answer question Nos.1 to 3 framed and extracted herein above against the assessee and in favou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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