Dismissing the appeal of the revenue the Court held that ; A party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. S. 40(a)(i) disallowance can be made only if the royalty falls under Explanation 2 to s. 9(1)(vi) but not if it falls under Explanation 6 to s. 9(1)(vi) .( ITA No. 397 of 2015. Dt. 29.01.2018)( AY.2009 -10)
CIT v. NGC Networks (India)(Pvt. Ltd( 2018) 167 DTR 245 / 304 CTR 306/ (2021) 432 ITR 326 (Bom)(HC) , www.itatonline.org
S.40(a)(ia):Amounts not deductible – Deduction at source –. A party cannot be called upon to perform an impossible Act i.e. to comply with a provision not in force at the relevant time but introduced later by retrospective amendment. S. 40(a)(i) disallowance can be made only if the royalty falls under Explanation 2 to s. 9(1)(vi) but not if it falls under Explanation 6 to s. 9(1)(vi) [ S.9(1)(vi), 194C,194J, 195 ]