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TMI Blog2019 (3) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Abhinav Mehrotra, Advocate Respondent by Shri C. K. Singh, D.R. 2 issue of non-deduction of TDS has already been considered in assessment proceedings and thus the matter was out of purview of Sec. 154 of the Act. 3. That the Ld. CIT Appeals has further erred in law as well as on facts in not appreciating that debatable issues are out of preview of Sec. 154. 4. That the Ld. CIT Appeals has further erred in law as well as on facts in not appreciating that 5. That the Ld. CIT Appeals has further erred in law as well as on facts in not appreciating that the provisions of Sec. 40(a)(ia) of the Act are not applicable in the instant case as nothing was payable at the end of the year i.e. 31.03.2012. 6. That the Ld. CIT Appeals has further erred in law as well as on facts in not appreciating the confirmation of M/S. Shivtej Developers that the entire receipts has been considered by him in his income. 7. That the Ld. CIT Appeals has further erred in law as well as on facts in not appreciating that no expenses has been claimed in the profit and loss account in the year under consideration as such expenses has been added in the closing stock at the end of the year when fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee that the contractor company has shown entire receipt of Rs. 34,71,938/-, as paid by the assessee company for contract work and had paid tax, do not have any force in view of the fact that proviso to this effect was inserted by Finance Act, 2012 and therefore, the addition was made by disallowing the said amount as per the provisions of section 40(a)(ia) of the Act,. Similar submissions were made before learned CIT(A) who also upheld the addition. 5. Learned A. R., before us, argued that the tax was not at all deductible as the assessee had not claimed the expenditure in the profit & loss 4 account but had capitalized the same and that is why the stock was increased. It was submitted that the question of deduction of tax at source would have arisen if the amount had been claimed as expenditure in the profit & loss account. It was further argued that learned CIT(A) should have allowed the appeal of the assessee as the due confirmation of the contractor with the certificate, that the entire receipts were considered by him in his return of income, was filed and therefore, assessee was not to be considered as assessee in default and therefore, provisions of section 40(a)(ia) wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nshyam Chaudhury vs. Pr. CIT in Income Tax Appeal No. 28 of 2016, vide order dated 22/08/2017, has decided this question in favour of the assessee by answering the following question: "Whether Under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal erred in law while setting aside the order of CIT (A) and restoring the issue of disallowance u/s 40(a)(ia) of the I.T.Act by retrospective application of second proviso to Section 40(a)(ia) of the Act, which amendment in fact was not curative but prospective w.e.f 01.04.2013." The answer to this question has been given by Hon'ble court from para 5 onwards, which are reproduced below: "5. We have gone through the aforesaid authorities. It is not disputed that Section 40(a)(ia) proviso is for the benefit of Assessee. When a provision has been made in fiscal statute for benefit of Assessee, in absence of any express 6 provision or a provision which by necessary implication gives a different impression, such provision which is beneficial to Assessee must be read and given effect to retroactively and reiterating this principle Constitution Bench of Apex Court in Commissioner of Income Tax Vs. Vatika ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive of previous year or years. Under Section 113 of the Act, the undisclosed income is chargeable to tax at the rate of 60%. 24. From the above, it becomes manifest that Chapter XIVB comprehensively takes care of all the aspects relating to the block assessment relating to undisclosed income, which includes Section 156BA(2) as the charging section and even the rate at which such income is to be taxed is mentioned in Section 113 of the Act. No doubt, Section 4 of the Act is also a charging section which is made applicable on 'total income of previous year'. As per Section 2(45), 'total income' means the total amount of income referred to in Section 5, computed in the manner laid down in the Act. Section 5 of the Act enumerates the scope of total income and prescribes, inter alia, that it would include all income which is received or is deemed to receive in India in any previous year by or on behalf of a person who is a Resident. No doubt, undisclosed income referred to in Chapter XIVB is also an income which was received but not disclosed, therefore, in the first blush, argument of the Department that undisclosed income referred to in Chapter XIVB is also a part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 113 of the Act cannot be treated as clarificatory in nature, thereby having retrospective effect. To make it clear, we need to understand the general principles concerning retrospectivity. General principles concerning retrospectivity 27. A legislation, be it a statutory Act or a statutory Rule or a statutory Notification, may physically consists of words printed on papers. However, conceptually it is a great deal more than an ordinary prose. There is a special peculiarity in the mode of verbal communication by a legislation. A legislation is not just a series of statements, such as one finds in a work 9 of fiction/non fiction or even in a judgment of a court of law. There is a technique required to draft a legislation as well as to understand a legislation. Former technique is known as legislative drafting and latter one is to be found in the various principles of 'Interpretation of Statutes'. Vis-à-vis ordinary prose, a legislation differs in its provenance, lay-out and features as also in the implication as to its meaning that arise by presumptions as to the intent of the maker thereof. 28. Of the various rules guiding how a legislation has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where to confer such benefit appears to have been the legislators object, then the presumption would be that such a legislation, giving it a purposive construction, would warrant it to be given a retrospective effect. This exactly is the justification to treat procedural provisions as retrospective. In Government of India and Ors. v. Indian Tobacco Association (2005) 7 SCC 396, the doctrine of fairness was held to be relevant factor to construe a statute conferring a benefit, in the context of it to be given a retrospective operation. The same doctrine of fairness, to hold that a statute was retrospective in nature, was applied in the case of Vijay v. State of Maharashtra and Ors. (2006) 6 SCC 286 It was held that where a law is enacted for the benefit of community as a whole, even in the absence of a provision the statute may be held to be retrospective in nature. However, we are confronted with any such situation here. 31. In such cases, retrospectively is attached to benefit the persons in contradistinction to the provision imposing some burden or liability where the presumption attaches towards prospectively. In the instant case, the proviso added to Section 113 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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