The assessee-company, engaged in mining, made payments to non-residents for services rendered abroad and also incurred expenditure on renovating temples and constructing a school in villages near its operational area. The revenue sought to disallow the payment to non-residents for failure to deduct tax at source and treated the community expenses as capital in nature. Upholding the decision of the Tribunal, the High Court held that the assessee could not be faulted for not deducting tax at source from payments which became taxable only due to a retrospective amendment to section 9(1)(vii). The Court, applying the maxim that the law does not compel the impossible, held that the assessee could not be expected to comply with a provision that was not on the statute book at the time of payment. (AY. 2010-11)