For the AY. 2005-06, the AO disallowed a sum of Rs. 55,17,037 in terms of s 40(a)(ia) of the Act. The assessee filed an appeal before the CIT(A) who held that the amendment brought about by the Finance Act, 2010 in S. 40(a)(ia) of the Act was retrospective in nature and deleted the addition. The Tribunal held that the provisions of S. 40(a)(ia) of the Act as amended by the Finance Act, 2010 were not retrospective in nature and reversed the order of the CIT (A) The Tribunal also dismissed the miscellaneous petition filed by the assessee. On appeal the court held that the Tribunal was wrong in holding that the amendment made by the Finance Act, 2010 in the provisions of S. 40(a)(ia) of the Act was not retrospective in operation. Followed CIT v .Calcutta Export Co. (2018) 404 ITR 654 (SC). ( AY.2005-06)
A. Y. Garments International Private Ltd. v. Dy. CIT (2020) 426 ITR 495 /273 taxman 162 (Karn)(HC)
S. 40(a)(ia): Amounts not deductible – Deduction at source –
Failure to pay tax deducted at source- Amendment by Finance Act, 2010 allowing deduction of payment where tax deducted in subsequent year, or during previous year but paid after due date for filing return — Amendment retrospective- Disallowance is held to be not valid [ S.139(1) ]