The Tax Publishers2019 TaxPub(DT) 1226 (Bom-HC)

INCOME TAX ACT, 1961

Section 40(a)(ia)

Business Since section 40(a)(ia) is not a penalty and insertion of second proviso to section 40(a)(ia) is declaratory and curative in nature and therefore, the said proviso would have retrospective effect from 1-4-2005, i.e., the date from which the main proviso 40(a)(ia) itself was inserted.

Disallowance under section 40(a)(ia) - Scope of amendment - Second proviso to section 40(a)(ia) whether applicable retrospectively -

In the instant appeal contention of revenue was that second proviso to section 40(a)(ia), which was inserted w.e.f 1-4-2013 would be available to assessee only prospectively from 1-4-2013. The aforesaid proviso provides that where an assessee fails to deduct whole or any part of the tax at source but is not deemed to be an assessee in default under the first proviso to section 201(1), then for the purpose of clause 40(a)(ia), it shall be deemed that assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the payee. Held: As per the settled position of law, the proviso to section 40(a)(ia) is beneficial to assessee and curative in nature. Section 40(a)(ia) is not a penalty and insertion of second proviso is declaratory and curative in nature and therefore, it would have retrospective effect from 1-4-2005, i.e., the date from which the main proviso 40(a)(ia) itself was inserted.

REFERRED : M/s. Hindustan Coca Cola Beverage (P) Ltd. v. CIT (2007) 293 ITR 226 (SC) : 2007 TaxPub(DT) 1452 (SC) CIT v. Ansal Land Mark Township (P) Ltd. (2015) 377 ITR 635 (Delhi) : 2015 TaxPub(DT) 3482 (Del-HC) M/s. Perfect Circle India Ltd. v. DCIT 2015 TaxPub(DT) 3633 (Mum-Trib)

FAVOUR : In assessee's favour

A.Y. :



IN THE BOMBAY HIGH COURT

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com