Case Law Details

Case Name : The Commissioner of Income Tax­ Vs Shraddha & S S Kale, Joint Venture (Bombay High Court)
Appeal Number : Income Tax Appeal No. 1712 of 2014
Date of Judgement/Order : 27/03/2017
Related Assessment Year :
Courts : All High Courts (4977) Bombay High Court (932)

This Appeal under Section 260­A of the Income Tax Act, 1961 (the Act), challenges the order dated 16th January, 2014 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order dated 16th January, 2014 is in respect of Assessment Year 2009­-10. 2 The Revenue urges the following question of law for our consideration:

“ Whether on the facts and in the circumstance of the case and in law, the Tribunal was justified in holding that amendment to Section 40(a)(ia) of the Act by the Finance Act, 2010 was retrospective in operation without appreciating that the law to be applied should be the one which is applicable to the relevant year?”

3 The impugned order dated 16th January, 2014 of the Tribunal upheld the order dated 31st August, 2012 of the Commissioner of Income Tax (Appeals) [CIT(A)]to the effect that the amendment to Section 40(a) (ia) of the Act which was introduced by Finance Act, 2010, is retrospective in nature. This was by following the order dated 21st June,2012 of its Coordinate Bench in ITO v/s. Mata Tulsomal Premchand (Pune Bench) and the decision of the Calcutta High Court in CIT v/s. Virgin Creations (Income Tax Appeal No. 302 of 2011 dated 23rd November, 2011). Thus, holding that any amount of tax deducted at source should be deposited with the state exchequer on/ or before the due date of filing of return of income, as prescribed under Section 139(1) of the Act, to ensure that the claim of expenditure is not disallowed.

4 We find that besides the decision of the Calcutta High Court in Virgin Creations(supra), the Delhi High Court in CIT v/s. Naresh Kumar [2013] 39 182, the Gujarat High Court in CIT v/s. Omprakash R. Chaudhary (2015) 57 Taxmann.38 and the Karnataka High Court in CIT v/s. Sri Scropio Engineering Ltd., 388 ITR 266 have held that the amendment to Section 40(a)(ia) of the Act by Finance Act, 2010 w.e.f. 1st April, 2010, is retrospective. This particularly, in view of the fact that the Courts have taken a view that the provision being a machinery provision, retrospective effect being given to it, is appropriate.

5 Mr. Charanjeet Chanderpal, learned Counsel for the Appellant­ Revenue is not able to point out any reason as to why the views of Calcutta, Gujarat, Delhi and Karnataka High Courts should be departed from. In the above view, as the various High Courts have already taken a view on this very issue and in the absence of any reasons to take a different view, we see no reason to discard the same. Thus, the amendment to Section 40 (a)(ia) of the Act by Finance Act, 2010 is retrospective with effect from 1st April, 2005 as held by various High Courts.

6 In view of the above, the question as framed does not give rise to any substantial question of law.

7 Accordingly, Appeal dismissed. No order as to costs.

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