Hon’ble Tribunal (SB) held in case of Merilyn Shipping & Transports and Hon’ble Allahabad High Court in case of Vector Shipping Services (P) Ltd. held that disallowance under Section 40(a)(ia) shall be made for the amount payable at the end of the year and not to the amount paid during the year.
Relying on the afore-said decision, Hon’ble Chennai Tribunal and Hon’ble Bangalore Tribunal held that disallowances under section 40(a)(ia) is to be applied for the amount payable at the end of the year and not for amount paid during the year. Further, Hon’ble Lucknow Tribunal rejected jurisdictional High Court ruling in Vector Shipping stating that in the said judgement, only a reference has been made to Merilyn Shipping and did not approve it.
The revenue has filed SLP against the decision of Hon’ble Allahabad High Court which was dismissed by the Hon’ble Supreme Court in the case of Vector Shipping Services (P) Ltd.
Article 136(1) that deals with SLPs is couched differently and reads as:-
“Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.”
Hon’ble Supreme Court in case of Bengal Chemical & Pharmaceutical Works Ltd v/s Their Workmen (1959 AIR 633) held that
“Article 136 of the Constitution does not confer a right of appeal to any party from the decision of any Tribunal, but it confers a discretionary power on the Supreme Court to grant special leave to appeal from the order of any tribunal in the territory of India.”
In Supreme Court Employees’ Welfare Association v/s Union of India (AIR 1990 SC 334)the Apex Court also observed that:-
“It is now a well settled principle of law that when a special leave petition is summarily dismissed under article 136 of the Constitution, by such dismissal this court does not lay down any law, as envisaged by article 141 of the Constitution, as contended by the learned Attorney-General.”
In view of the afore-said arguments, it can be said that about applicability of Section 40(a)(ia) is still awaited.
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(Author- Aditya Singhania & Nischal Agarwal)