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TMI Blog2020 (7) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Year 2012-13. Both these appeals were heard together and are being disposed of by way of this common order for the sake of convenience. 2. The grounds raised by the assessee in both these appeals are identical and for the sake of clarity, we reproduce the grounds from one of these appeals viz., ITA No.90/Bang/2018. These grounds are as under: 1. The impugned order of CIT(A) is bad and unsustainable in the eye of law since the same is passed without properly understanding the facts involved. 2. The CIT(A) grossly erred in not appreciating that the expenditure incurred was mainly towards business promotion and hence the same did not warrant deduction of tax at source and therefore, S.40(a)(ia) was not applicable. 3. The CIT(A) oug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayer who fails to deduct the tax from the resident payee shall not be deemed to be an assessee in default in respect of such tax if such resident payee has furnished his return of income under section 139, has taken into account such sum for computing income in such return of income and has paid the tax due on the income declared by him in such return of income. In the said written submissions submitted before CIT(A), this was also submitted that the payee in the present case has filed return of income and has included the amount paid by the assessee for computing income in such return of income and has paid tax due on the income declared by the payee in such return of income and therefore, the assessee cannot be considered as the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on payments made against Sales Promotion, Advertisement, Commission and Audit Fee. It is to be noted that Explanation to sub clause (ia) of section 40(a) clearly indicates that an assessee ought to deduct tax at source on such payments. 10. In the instant appeal, it is noted that the appellant had no explanation to offer before AO. Even during appellate proceedings, appellant failed to explain reasons for its failure to deduct tax at source. 11. Therefore, in view of the facts narrated above, no interference in AO's order is called for since no infirmity arose." 5. We also reproduce relevant paras of the written submissions filed by the assessee before CIT(A) in the case of M/s. Sai Panchami Developers in ITA No.90/Bang/2018 from p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of tax liability by the resident payee on payment of any sum received by him without deduction of tax, section 201 was amended by Fin Act 2012 to provide that the payer who fails to deduct the whole or any part of the tax o payment made to a resident payee shall not be deemed to be an Assessee in default respect of such tax if such resident payee - (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, The date of payment of taxes by the resident payee shall be deemed to be the date on return has been furnished by the payer. SUPPORTING STATEMENT The payee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid tax, such disallowance cannot be invoked in this case. We contend that the object of the amendment made was that though the assessee has not deducted TDS but there has been no loss to the Revenue, as such the disallowance under Section 40(a) (ia) should not be invoked. "In the case of Bharti Shipyard Ltd vs. DCIT (141 TTJ 129), and that of the Hon'ble Delhi High Court in case of Rajinder Kumar wherein it was held that any amendment of a provision which is aimed at removing unintended consequences with the intention to make the provisions operative should be treated as retrospective no matter whether the same has been given effect prospectively. The Tribunal carefully interpreted the legislative amendment of section 40(a) (ia) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax act. We request you to grant the relief to the Assessee by allowing the so much of expenses stated above in its return of income. We want to draw your kind attention to the recent amendment to the section 40(a)(ia) restricting the disallowance to 30% from 100% disallowance on the expenses paid on which TDS is not deducted. We request you to consider Assessees request on this and grant any remedy if possible. The Assessee could not collect the information from the payee for the below amounts paid which are disallowed by the AO. Sales promotion INR 44,00,000 Advertisement INR 16,60,075 Audit Fee INR 1,28,000 TOTAL INR 61,88,075" 6. From the above paras of identical written submissions filed by the assessee before CI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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