Case Law Details
The question now is as to whether to follow the decision of the Hon’ble Special bench in the case of Bharati Shipyard Ltd vs. DCIT (ITAT Mumbai) which has taken the view that Amendment by the Finance Act, 2010 to the provisions of Sec.40(a)(ia) of the Act is prospective and not retrospective from 1.4.2005 or the decision of the Hon’ble Calcutta High Court taking a contrary view.
On the above question, the learned counsel for the Assessee brought to our notice the decision of the ITAT Delhi in the case of Tej International (P) Ltd. v. Dy. CIT (2000) 69 TTJ (Del) 650, wherein it was held that in the hierarchical judicial system that we have in India, the wisdom of the court below has to yield to the higher wisdom of the Court above, and therefore, once an authority higher than this Tribunal has expressed its esteemed views on a an issue, normally, the decision of the higher judicial authority is to be followed. The Bench has further held that the fact that the judgment of the higher judicial forum is from a non-jurisdictional High court does not really alter this position, as laid down by the Hon’ble Bombay High Court in the case of CIT v. Godavaridevi Saraf 113 ITR 589(Bom).
In view of the above, we hold following the decision of the Hon’ble Calcutta High Court that Amendment to the provisions of Sec.40(a)(ia) of the Act, by the Finance Act, 2010 is retrospective from 1.4.2005. Consequently, any payment of tax deducted at source during previous years relevant to and from AY 05-06 can be made to the Government on or before the due date for filing return of income u/s. 139(1) of the Act. If payments are made as aforesaid, then no deduction u/s.40(a)(ia) of the Act can be made. Admittedly in the present case the Assessee had deposited the tax deducted at source on or before the due date for filing return of income u/s. 139(1) of the Act and therefore the impugned disallowance deserves to be deleted. We order accordingly and allow the appeal by the Assessee.
IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI
ITA NO. 132 1/MUM/2009(A.Y. 2005-06)
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