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COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: July 3, 2015 (Date of pronouncement)
DATE: August 21, 2015 (Date of publication)
AY: 2005-06 to 2007-08
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CITATION:
S. 40(a)(ia): (a) The second provisio inserted by FA 2012 cannot be treated as retrospective in operation (b) The fact that the payees have already paid tax on the amounts paid does not mean that a disalliowance for failure to deduct TDS cannot be made, (c) S. 40(a)(ia) cannot be interpreted to mean that it applies only to amounts "paid" and not to those "payable"

The fact the second proviso was introduced with effect from 01.04.2013 is expressly made clear by the provisions of the Finance Act 2012 itself. A statutory provision, unless otherwise expressly stated to be retrospective or by intendment shown to be retrospective, is always prospective in operation. Finance Act 2012 shows that the second proviso to Section 40 (a)(ia) has been introduced with effect from 01.04.2013. Reading of the second proviso does not show that it was meant or intended to be curative or remedial in nature, and even the appellants did not have such a case. Instead, by this proviso, an additional benefit was conferred on the assessees. Such a provision can only be prospective

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Posted on by editor
COURT:
CORAM: ,
SECTION(S): , ,
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: July 20, 2015 (Date of pronouncement)
DATE: August 6, 2015 (Date of publication)
AY: 2005-06, 2006-07
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CITATION:
S. 40(a)(ia)/ 194C/ 194J: Deduction u/s 194C instead of u/s 194J renders the shortfall liable for disallowance u/s 40(a)(ia)

The expression “tax deductible at source under Chapter XVII-B” occurring in Section 40(a)(ia) has to be understood as tax deductible at source under the appropriate provision of Chapter XVII-B. Therefore, as in this case, if tax is deductible under Section 194J but is deducted under Section 194C, such a deduction would not satisfy the requirements of Section 40(a)(ia). The latter part of this Section that such tax has not been deducted, again refers to the tax deducted under the appropriate provision of Chapter XVII-B. Thus, a cumulative reading of this provision, therefore, shows that deduction under a wrong provision of law will not save an assessee from Section 40(a)(ia)

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