|DATE:||(Date of pronouncement)|
|DATE:||December 10, 2012 (Date of publication)|
|Click here to download the judgement (merilyn_shipping_40_a_ia_TDS_special_bench_stay.pdf)|
Special Bench verdict that s. 40(a)(ia) applies only to “amounts payable” stayed
In Merilyn Shipping & Transports v. ACIT 146 TTJ 1 (Vizag), the Special Bench held by a majority that as s. 40(a)(ia) refers to “amount payable“, only the outstanding amount or the provision for expense as of 31st March (and not the amount already paid during the year) is liable for disallowance if TDS is not deducted. It was held that this interpretation was necessary as the Finance Bill proposed the disallowance to apply to any “amount credited or paid” but this was changed to “amount payable” in the Finance Act. On the department’s appeal to the High Court, the High Court has vide order dated 8.10.2012 directed “interim suspension” of the Special Bench’s verdict.
Thank God ! The ITAT ( JM+VPon special bench) had gone a bit too far, and nullified a very well reasoned order written by Hon’ble Shri S V Mehrotra AM.