The amendment brought in by the Finance Act with retrospective effect, which was passed in the year subsequent to the year under consideration, should not be considered for penalizing the assessee by way of disallowance u/s 40(a)(ia) of the Act.
A bare reading of section 54F clearly shows that the assessee is entitled for exemption in case he / she constructs a residential house within a period of three years after the sale of the capital asset. However, sub clause (4) of section 54F clearly says that the unutilized portion of the net sale consideration which is otherwise liable for capital gain tax shall be deposited in the capital gain account scheme within the period of due date for filing return of income u/s 139.
Provisions of sec. 40(a)(ia) do not provide for absolute disallowance as in the case of say, sec. 40A(3) of the Act. The amount disallowed u/s 40(a)(ia) in one year can be claimed as deduction in the year in which the TDS provisions are complied with.
Issue – The facts relating to the two issues are stated in brief. The assessee is a Kerala State owned public limited company, engaged in the business of providing infrastructural facilities to industries. It runs an industrial park at Kakkanad, Kochi.
The Mumbai Bench found that short deduction of TDS, if any, could have been considered as liability under the Income-tax Act as due from the assessee. Therefore, the disallowance of the entire expenditure, whose genuineness was not doubted by the assessing officer is not justified. A similar view was also taken by the Kokatta Bench of this Tribunal in the case of CIT vs M/s S.K. Tekriwal (supra).
In yet another case of Shri Ramchandra D Keluskar in ITA No.668/PN/10, the Pune Bench of this Tribunal found that when there are no books of account, the question of its audit does not arise. Therefore, this Tribunal is of the considered opinion that when the books of account was not maintained and the penalty levied u/s 271A was deleted, this Tribunal is of the considered opinion that there is no justification for levying penalty u/s 271B of the Act for not getting the books of account audited.
The assessee has explained before us the hierarchy of Sacred Heart Congregation viz., Generalate, Province, Region and Convents. There is no dispute that the applicant herein is a Convent. It was further submitted that the constitution (meaning ‘bye laws’) is the same for all the four hierarchies stated above. It was further submitted that Chapter X of the constitution, referred above, is the authority of services given to the convents. We have gone through the Chapter X of the constitution referred above. We notice that the Chapter X discusses about the formation of new houses, local communities, colonial house, local supervisor, local assembly, local council, service centres etc., and the mode of regulation of the same. In clause 278, which is prescribed under the head “Colonial House”, it is stated as under:-
In respect of a taxpayer to whom the double taxation avoidance agreement applies, the provisions of the Indian Income-tax Act shall apply to the extent they are more beneficial to that taxpayer. In other words, if the provisions of DTAA are more beneficial to the taxpayer, then the provisions of DTAA would prevail over the Indian Income-tax Act. Since the DTAA is silent about the surcharge and education cess for the purpose of deduction of tax at source, this Tribunal is of the considered opinion that the taxpayer may take advantage of that provision in the DTAA for deduction of tax. The CIT(A) has only deleted the tax component to the extent of surcharge and education cess at the rate applicable under the DTAA. Therefore, this Tribunal do not find any infirmity in the orders of lower authority. Accordingly the same are confirmed.
It is settled principles of law that in order to avail benefits under the beneficial provision, the conditions provided by the legislature has to be complied with. Therefore, this Tribunal is of the considered opinion that in view of the mandatory provisions contained in section 139(1) r.w.s. 80A(5) of the Act it is mandatory for every cooperative society for claiming deduction u/s 80P to file the return of income and to make a claim of deduction u/s 80P of the Act in the return itself. In view of the above discussion, if the return was not filed either u/s 139(1) or 139(4) or in pursuance of notice issued u/s 142(1) or u/s 148, the taxpayer is not entitled for any deduction under section 80P of the Act.
In the case before the Kerala High Court, the question arose for consideration was whether a transport contract for mere carriage of goods without loading and unloading facility would amount to carrying out any work within the meaning of section 194C(1) of the Act.
