Ita/590/2013 Of The Commissioner Of Income Tax v. Sri Santosh Kumar Shetty

IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THR 15 DAY OF JULY 2014 PRESENT THR HON’BLE MR.JUSTICE N. KUMAR AND THR HON’BLE MR.JUSTICE B.MANOHAR INCOME TAX APPEAL NO.590/2013C/W. INCOME TAX APPEAL NOs.333/2012,457/2013, 319/2009, 242/2012,3334/2012, 12/2013 AND 595/2013 IN L.T.A.NO.590/2013 BBRTW RE 1.COMMISSIONBR OF INCOME TAX| MANGALORE, 2.ASSISTANT COMMISSIONER OFINCOME TAXCIRCLE-1(1) MANGALORE; INCOME TAXCIRCLE-1(1) MANGALORE; _.. APPELLANTS © (BY SRI E.I.SANMATHI, ADV.) AND: SRI SANTOSH KUMAR SHBITTYPROP: M/S DURGAMBA|CONSULIANTY|P FLOOR, SRI TARA TOWERSBAJPEK ROADSURATHKAL — RBSPONDENT (BY SRI A.SHANKAR AND SRI M.LAVA, ADVS.) THIS APPEAL IS FILED UNDER SECTION 260-A OFL.T. ACT, 1961,ARISINGOUT.OF|ORDERDATED26/07/2013 PASSED IN ITA NO.1194/BANG/2012, FOR|THE ASSESSMENT YEAR 2008-09, PRAYING THIS HON'BLECOURT TO: 1.RFORMULATETHERSUBSTANTIALQUESTIONS OF LAW STATED THEREIN, 11.SET ASIDE THE APPELLATK ORDER DATED26/07/2013 PASSED BY THE ITAT, ‘B'|BENCH,BANGALOREINAPPEALPROCEEDINGS ITA NO.1194/BANG/2012|DATED 26/07/2013, AS SOUGHT FOR IN|THIS APPEAL. IN I.T.A.NO.333/2012 BBRTW RE 1.THRE COMMISSIONER OF INCOME TAXC.R. BUILDING QUEENS ROADBANGALOREBANGALORE 2.THER ASST. COMMISSIONBR OF INCOME TAXCIRCLE-3(1) C.R. BUILDING|QUEENS ROADBANGALORE ... APPELLANTS © (BY SRI KAMALADHAR G, ADV.) AND: SHRI M K GURUMURTHY|PROP. G.S. POWER SYSTEMS|NO.462/34, 12 CROSS* MAIN, WILSON GARDENBANGALORE -560 O27 — RBSPONDENT (BY SRI CHYTHANYAK K, ADV.) THIS APPEAL IS FILED UNDER SECTION 2J60-A OFTT.ACT, 1961,ARISINGOUT.OF|ORDERDATHKD10/05/2012 PASSED IN ITA NO.717/BANG/2011, FOR THEASSESSMENT YEAR 2008-2009, PRAYING THAT THISHON BLE COURT MAY BE PLEASED TO: I. FORMULATE THE SUBSTANTIAL QUESTIONS OFLAW SIATED THEREIN, ll. ALLOW THR APPKAL AND SKIT ASIDE THRORDERS PASSED BY THE ITAT, BANGALORE IN ITANO.717/BANG/2011 DATED 10/05/2012 CONFIRMING|THR ORDBR OF THR APPBRLLATK COMMISSIONBR ANDCONFIRM THRE ORDER PASSEKED BY THE ASSISTACOMMISSIONER.OF|INCOMETAX,CIRCLE-3(1), BANGALORE, IN THE INTEREST OF JUSTICE AND EQUITY. IN L.T.A.NO.4957/201 BBRTW RE 1.THR COMMISSIONEBR OF INCOME TAXC.R.BUILDINGQUEENS ROADBANGALOREC.R.BUILDINGQUEENS ROADBANGALORE 2.THERE ADDITIONAL COMMISSIONER OF INCOME TARANGE-3)C.R.BUILDINGQUEENS ROADBANGALORERANGE-3)C.R.BUILDINGQUEENS ROADBANGALORE _.. APPELLANTS © (BY SRI KAMALADHAR G, ADV.) AND: SHRI S S WARADPROP: M/S.KARNATAKA ROADLINESNO.13, RANGAPPA REDDY COMPLEX|R.V.ROAD, MINERVA CIRCLEBANGALORE — 560 O0O4 — RBSPONDENT (BY SRI S PARTHASARATHI, ADV.) | THIS APPEAL IS FILED UNDER SECTION 2J60-A OFTT.ACT, 1961,ARISINGOUT.OF|ORDERDATHKD03/05/2013 PASSED IN ITA NO.375/BANG/2012, FOR THEASSESSMENT YEAR 2009-2010, PRAYING THIS HON'BLECOURT TO: inRFORMULATETHERSUBSTANTIALQUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPEAL AND SET ASIDE THE|ORDER PASSED BY THE ITAT, BANGALORE|INITA|NO.375/BANG/2012DATHD.03/05/2013 AND CONFIRM THE ORDER OF|THEAPPELLATECOMMISSIONER,CONFHKIRMING THR ORDER PASSED BY THADDITIONAL COMMISSIONER OF INCOME|TAX, RANGE-3, BANGALORE IN I.T.A.NO.319/2009 BETWEEN: 1.THR COMMISSIONEBR OF INCOME TAXC.R.BUILDING, ATTAVAR. MANGALORE 2.THE DY.COMMISSIONER OF INCOME TAX, CIRCLE- 1,UDUPI. ... APPELLANTS © (BY SRI K V ARAVIND, ADV.) AND: SRIL.B.UDAYA KUMAR SHBTTYCIVIL CONTRACTORKRODA BAILOORU POST,KUNDAPUR TALU KUDUPI DIST ~ RESPONDENT (BY SRI CHANDRASHEKAR FORoRI R RAMAMURTHY, ADV.) THIS APPEAL IS FILED UNDER SECTION 260-A OFI.T. ACT, 1961, ARISING OUT OF ORDER DATED 16-1-2009|PASSEDIN_ITA|NO.879 /BANG/2008,FORTHERASSESSMENT|YHAR.2005-06,PRAYINGTHATTHIS|HON'BLE COURT MAY BBR PLEASED TO: iaRFORMULATETHERSUBSTANTIALQUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPEAL AND SET ASIDE THE:ORDER PASSED BY THE IIAIL BANGALOREIN ITA NO.879/2008 DATED 16-1-2009|CONFIRM THE ORDERS OF THR APPBKRLLATCOMMISSIONER AND CONFIRM THE ORDERPASSED BY THE ASSESSING OFFICER, IN-THE INTEREST OF JUSTICE AND EQUITY. IN L.T.A.NO.242 /201 BBRTW RE ... APPELLANTS © (BY SRI K V ARAVIND, ADV.) AND: SRIL.B.UDAYA KUMAR SHBTTYCIVIL CONTRACTORKRODA BAILOORU POST,KUNDAPUR TALU KUDUPI DIST ~ RESPONDENT (BY SRI CHANDRASHEKAR FORoRI R RAMAMURTHY, ADV.) THIS APPEAL IS FILED UNDER SECTION 260-A OFI.T. ACT, 1961, ARISING OUT OF ORDER DATED 16-1-2009|PASSEDIN_ITA|NO.879 /BANG/2008,FORTHERASSESSMENT|YHAR.2005-06,PRAYINGTHATTHIS|HON'BLE COURT MAY BBR PLEASED TO: iaRFORMULATETHERSUBSTANTIALQUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPEAL AND SET ASIDE THE:ORDER PASSED BY THE IIAIL BANGALOREIN ITA NO.879/2008 DATED 16-1-2009|CONFIRM THE ORDERS OF THR APPBKRLLATCOMMISSIONER AND CONFIRM THE ORDERPASSED BY THE ASSESSING OFFICER, IN-THE INTEREST OF JUSTICE AND EQUITY. IN L.T.A.NO.242 /201 BBRTW RE 1.THR COMMISSIONEBR OF INCOME TAXCR BUILDINGQUEENS ROADBANGALORE 2.THE ASST. COMMISSIONER OF INCOME, TAX CIRCLE-3(1)CR BUILDINGQUEENS ROADBANGALORE _.. APPELLANTS © (BY SRI KAMALADHAR G, ADV.) AND: SHRI M G VISHWANATH REDDY|PROP:M/S EXOTIC GRANITES AND MARBLESNO.5, LALBAGH HOSUR ROADBANGALORE -560027 — RBSPONDENT (BY SRI A.SHANKAR AND SRI M.LAVA, ADVS.) THIS APPEAL IS FILED UNDER SECTION 260-A OFL.T. ACT, 1961,ARISINGOUT.OF|ORDERDATED30/03/2012 PASSED IN ITA NO.660/BANG/2011, FOR THEASSESSMENT YEAR 2008-2009, PRAYING THAT THIS)HON'BLE COURT MAY BBR PLEASED TO: iaRFORMULATETHERSUBSTANTIALQUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPBEAL AND SET ASIDE THEORDER DATED 30/03/2012 PASSED BY|THE.ITAT, BANGALOREINITA|NO.660/BANG/2011DATEKD30/03/2012)CONFIRMING|THE.ORDEROF|THEAPPELLATE COMMISSIONER AND CONFIRMTHR ORDBR PASSKHD BY THR ASSISTANTCOMMISSIONER OF INCOME TAX, CIRCLE-3(1), BANGALORE, IN THE INTEREST OF)JUSTICE AND EQUITY. IN I.T.A.NO.334/2012 BETWEEN: 1.THR COMMISSIONEBR OF INCOME TAXCR BUILDING.QUEENS ROADBANGALORE| 2.THE ASST. COMMISSIONER OF INCOME, TAX CIRCLE-3(1)CR BUILDINGQUEENS ROADBANGALORE|_.. APPELLANTS © (BY SRI KAMALADHAR G, ADV.) © AND: SHRI K P VISHWANATHANNO.1/7, 2 KRLOOR,DDUTIL INDUSTRIAL SUBURBOPP. KANTKERAVA STUDIO.YRBSHWANTHAPUR BANGALORE-560022 ~ RESPONDENT (BY SRI S PARTHASARATHI, ADV.) THIS APPEAL IS FILED UNDER SECTION 260-A OF|L.T.ACT, 1961,|ARISING|OUT.OF|ORDERDATHKD29/05/2012 PASSED IN ITA NO.692/BANG/2011, FOR THEASSESSMENT YEAR 2008-2009, PRAYING THAT THISHON'BLEK COURT MAY BB PLEASEKD TO inRFORMULATETHRSUBSTANTIALQUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPEAL AND SET ASIDE THE|ORDERS PASSED BY THE ITAT, BANGALORE|INITA|NO.692/BANG/2011DATHD.29/05/2012 CONFIRMING THE ORDER OF|THE.APPBRLLATECOMMISSIONER.ANT)CONFHKIRM THRE ORDER PASSED BY TASSISTANT COMMISSIONBR OF INCOME|TAX, CIRCLE-3(1), BANGALORE, IN THE)INTEREST OF JUSTICE AND EQUITY. IN I.T.A.NO.12/2013 BETWEEN: 1.THRE COMMISSIONER OF INCOME TAXCR BUILDING.QUEENS ROADBANGALORE|CR BUILDING.QUEENS ROADBANGALORE| 2.THER ASST. COMMISSIONER OF INCOME;TAX, RANGE - 3)CR BUILDING.QUEENS ROADBANGALORE| _.. APPELLANTS © (BY SRI KAMALADHAR G, ADV.) | AND: SHRI S.S. WARAD PROP: M/S KARNATAKA ROADLINESNO.13, RANGAPPA REDDY COMPLEXR.V.ROAD, MINERVA CIRCLEBANGALORE -560004 — RBSPONDENT (BY SRI S PARTHASARATHI, ADV.) THIS APPBRAL IS FILED UNDER SBKCTION 2J6O0-AL.T.ACT, 1961,|ARISING|OUT.OF|ORDERDATHKD03/08/2012 PASSED IN ITA NO.375/BANG/2012, FOR THEASSESSMENT YEARS 2009-2010, PRAYING THAT THISHON'BLEK COURT MAY BB PLEASEKD TO 1.KHORMULATETHESUBSTANTIALQUESTIONS OF LAW STATED THEREIN,QUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPEAL AND SET ASIDE THE|ORDER DATED 03/08/2012 PASSED BY'THE.ITAT,BANGALORE|IN_ITA|NO.375/BANG/2012 AND CONFIRM THE)ORDEROF|THEAPPELLATECOMMISSIONBR CONFIRMING THR ORDER|PASSEDBY|THE.ADDITIONALCOMMISSIONER OF INCOME TAX, RANGE-3,BANGALORE.| IN L.T.A.NO.595/2013 BBRTW RE 1.THR COMMISSIONEBR OF INCOME TAXCR BUILDINGCR BUILDING QUEENS ROAD BANGALORE 2.THER ASST. COMMISSIONER OF INCOME;TAX, CIRCLE-3(1)CR BUILDING.QUEENS ROADBANGALORE _.. APPELLANTS © (BY SRI KAMALADHAR G, ADV.) ANT): SMT. VIMALA S.W. WARADPROP: M/S MAHENDRA ROAD LINESNO.13, RANGAPPA REDDY COMPLEXR V ROAD, MINERVA CIRCLEBANGALORE - 560004 1.KHORMULATETHESUBSTANTIALQUESTIONS OF LAW STATED THEREIN,QUESTIONS OF LAW STATED THEREIN, Il.ALLOW THR APPEAL AND SET ASIDE THE|ORDER DATED 03/08/2012 PASSED BY'THE.ITAT,BANGALORE|IN_ITA|NO.375/BANG/2012 AND CONFIRM THE)ORDEROF|THEAPPELLATECOMMISSIONBR CONFIRMING THR ORDER|PASSEDBY|THE.ADDITIONALCOMMISSIONER OF INCOME TAX, RANGE-3,BANGALORE.| IN L.T.A.NO.595/2013 BBRTW RE 1.THR COMMISSIONEBR OF INCOME TAXCR BUILDINGCR BUILDING QUEENS ROAD BANGALORE 2.THER ASST. COMMISSIONER OF INCOME;TAX, CIRCLE-3(1)CR BUILDING.QUEENS ROADBANGALORE _.. APPELLANTS © (BY SRI KAMALADHAR G, ADV.) ANT): SMT. VIMALA S.W. WARADPROP: M/S MAHENDRA ROAD LINESNO.13, RANGAPPA REDDY COMPLEXR V ROAD, MINERVA CIRCLEBANGALORE - 560004 ~ RESPONDENT (BY SRI S PARTHASARATHI, ADV.) THIS APPEAL IS FILED UNDER SECTION 260-A OF|L.T.ACT, 1961,|ARISING|OUT.OF|ORDERDATHKD11/06/2013, PASSED IN ITA NO.1419/BANG/2012, FORTHE ASSESSMENT YEAR 2009-10, PRAYING THAT THISHON'BLEK COURT MAY BB PLEASEKD TO Il. FORMULATE THE SUBSTANTIAL QUESTIONS|OF LAW STATED ABOVE. OF LAW STATED ABOVE. Il.ALLOW THR APPRBAL AND SHT ASIDE THEORDER PASSED BY THE ITAT, BANGALORE IN|ITA NO.1419/BANG/2012 DATED 11/06/2013CONFIRMING THR ORDER OF THR APPBKRLLATCOMMISSIONBR AND CONFIRM THR ORDER|PASSED BY THE ASSISTANT COMMISSIONER|OF INCOME TAX, CIRCLE-3(1), BANGALORE.ORDER PASSED BY THE ITAT, BANGALORE IN|ITA NO.1419/BANG/2012 DATED 11/06/2013CONFIRMING THR ORDER OF THR APPBKRLLATCOMMISSIONBR AND CONFIRM THR ORDER|PASSED BY THE ASSISTANT COMMISSIONER|OF INCOME TAX, CIRCLE-3(1), BANGALORE. THRESH APPEALS COMING ON FOR FINAL HEARINGTHIS DAY,KUMAR J., DELIVERED THE FOLLOWING: COMMON JUDGMENT These appeals are filed by the Revenue challengingthe order passed by the tribunal. 2. The same questions of law are involved in all.these appeals, therefore, all are taken up together anddisposed of in this common judgment. 3. The substantial questions of law that arise forconsideration in all these appeals is whether, theamendment to Section 4O(a)(ia) by the Finance Act,2010, which is given effect from 01.04.2010 isretrospective in nature. 4. Prior to the amendment, the said provision read as under:-| Section40(a)(ia)°anyinterest,commission or brokerage, rent, royalty fees|for professional services or fees for technicalservices payable to a resident, or amounts.payable to a contractor or sub-contractor,|being resident, for carrying out any work|(including supply of labour for carrying outany work), on which tax is deductible at|source under Chapter XVII-B and such tax.has not been deducted or, after deduction,|has not been paid, on or before the due date|specified in sub-section (1) of section 139: Provided that where in respect of any such.SUM,tax|hasbeen.deducted|in|anysubsequent year, or has been deductedduring the previous year but paid after the|due date specified in sub-section (1) of section|139, such sum_ shall be allowed as adeduction in computing the income of the|previous year in which such tax has beenpaid. Provided further that where an assessee fails|to deduct the whole or any part of the tax in|accordance with the provisions of Chapter|XVII-B on any such sum but ts not deemed to. be an assessee in default under the first|proviso to sub-section (1) of section 201, then,for the purpose of this sub-clause, it shall bedeemed that the assessee has deducted and|paid the tax on such sum on the date offurnishing of return of income by the residentpayee referred to in the said proviso. Explanation: For the purposes of this sub-clause, - (i)“commission or brokerage” shall havethe same meaning as in Explanation 2to clause (t) of the Explanation to section194H;the same meaning as in Explanation 2to clause (t) of the Explanation to section194H; (it)“fees for technical services” shall havethe same meaning as in Explanation 2to clause (vit) of sub-section (1) ofsection 9;the same meaning as in Explanation 2to clause (vit) of sub-section (1) ofsection 9; be an assessee in default under the first|proviso to sub-section (1) of section 201, then,for the purpose of this sub-clause, it shall bedeemed that the assessee has deducted and|paid the tax on such sum on the date offurnishing of return of income by the residentpayee referred to in the said proviso. Explanation: For the purposes of this sub-clause, - (i)“commission or brokerage” shall havethe same meaning as in Explanation 2to clause (t) of the Explanation to section194H;the same meaning as in Explanation 2to clause (t) of the Explanation to section194H; (it)“fees for technical services” shall havethe same meaning as in Explanation 2to clause (vit) of sub-section (1) ofsection 9;the same meaning as in Explanation 2to clause (vit) of sub-section (1) ofsection 9; (111)“professional services” shall have thesame meaning as in clause (a) of theExplanation to section 194J;same meaning as in clause (a) of theExplanation to section 194J; (iv)“work” shall have the same meaning asin Explanation III to section 194C;in Explanation III to section 194C; (v)“rent” shall have the same meaning asin clause (i) to the Explanation to section194-I;in clause (i) to the Explanation to section194-I; (vt)“royalty” shall have the same meaningas in Explanation 2 to clause (v1) of sub-section (1) of section 9;as in Explanation 2 to clause (v1) of sub-section (1) of section 9; By Finance Act, 2010, the said provision is substituted by the following: | Substituted by the Finance Act, 2010,w.e.f. 01.04.2010. Prior to its substitution,|proviso as substituted by the Finance Act,2008, w.r.e.f. 01.04.2005, read as under: “Provided that where in respect of any such|SUM”,tax|has|been.deductedIn|anysubsequent year, or has been deducted:- (A). during the last month of the previous yearbut paid after the said due date; or'but paid after the said due date; or' (B). during any other month of the previous|year but paid after the end of the saidprevious year,year but paid after the end of the saidprevious year, Such sum shall be allowed as a deduction in|computing the income of the previous year in|which such tax has been paid.” o. The argument of the Revenue is, when the|Finance Act, 2010, expressly states that the saidprovision would come into effect from 01.04.2010, it is"not permissible tor the Tribunals or the Courts to give ita retrospective effect prior to the date and therefore, it issubmitted that the order passed by the Tribunal holdingit as retrospective notwithstanding the fact that theparliament made its intention clear by declaring that itcomes into effect from 01.04.2010. Therefore, theimpugned orders are liable to be set aside. 6. This question came up for consideration before|the Gujarat High Court in the case of|Commisstoner of Income Tax, Ahmedabad IV Vs. Om Prakash R Chaudhary in'Tax Appeal Nos.412/2013and|connected matter, which came to be decided on922,11.920, after referring to the judgments ofAlideMotors (P.) Ltd. Vs. CIT reported in AIR 1997 SCIT3S6andCIT Vs. Alom Extrusions Limited reportedin (2009) 319 ITR 306,has held as under: “15 4:Thus,|consideringrelevantlegislatiue changes made by the Parliament|from time to time and some of the decisionsrelevanttoconsiderthequestionof|retrospectivityraisedinthesepresentappeals, the focal question, therefore, would|be whether the amendment brought about by|way of Finance Act 2010 in Section 40 |[a/(ta)with effectfrom 1[Sf]“April 2010 could be said tobe clarificatory in nature for attending to|unintended consequences, and therefore, 1shaving retrospective effectfrom 1[St]April 2005.16: A closer examination needs to bedone as to whether the amended provisionaims to expand the prevailing position and|whether the same being in the nature of|curative,retrospectivityof|theSame1S.permissible as is being contended for and onbehalf of the assessee. At this’ stage,|therefore, the true effect of such amendment|needs to be discerned. 16.1: It ts demonstrated before us thattheTDS|provisioncausedunintendedinexplicable situation whereby the assessee|who deducted the tax at source from the|payments made by it for and on behalf of theGovernment and then if misses out the time|limit of depositing the same with the Treasury| within the time prescribed, the amount spentfor its business purposes on account of thelate deposit of such tax would result into|disallowance of entire expenditure under|Section 40/a/(ia). The said proviso thereby|caused immense hardship. The amendmentunder consideration made by the Finance Act|2010 relaxes the rigors of such provision bypermitting payment of Tax till the filing ofreturn as provided under sub-section (1) of|section 139 of the Act. 16.2: One can notice that the object ofbrining about provision of Section 40(a)(ta) in|the year 2005 - 06 was to augment|compliance of TDS provision. TDS either not|deducted or deducted but not paid in respect|of|paymentof|interest,COmmIisSSsiOrbrokerage etc., before the expiry of time|prescribed under sub-section (1) of Section200 and in accordance with the otherprovisions of Chapter XVII, such amount shallnot be deducted in computing the ‘income ‘chargeable under the head ‘Profit & Gains’ ofbusiness or profession. Such provision starts|with non obstante clause which states that|notwithstandinganythingcontained|insection 30 to 38 of the Income-tax Act, if the|tax deducted at source is not paid within|prescribed time [under Section 200 (1)/, noamount could be deducted while computing|the|income,|underChapterTV|of|the|‘computation of business income’. 16.3: Thereafter, by way of amendmentof Finance Act, 2008, further amendment wasmade whereby TDS deductible and deducted|in the last month of previous year if was not|paid till the due date offiling of return undersub-section (1) of Section 139 and in any|other case, on or before the last day of the|previous year, Section 40/(a})(ia) provided fo the disallowance of expenses like interest,|commuission, brokerage, etc. 16.4: Since, this had created anomaly,whereby tax deducted in the last month was|permitted payment till filling of return as persub-section (1) of Section 139 whereas for the|TDS deducted during the rest of the months,|period was provided only till 31[Sf]‘March of thePrevious|Year,FinanceAct,QYQO!LUaAbrought.To|bring|parity,toremedyunintended consequences and to make the|provision workable, it proposed to amend the|said provision and provided inter alia that no}disallowancewouldbe.made|uhafterdeduction of tax during the previous year, the|same has been paid on or before the due date|of filing of return of income as specified in|sub-section (1) of Section 139. This has been|given retrospective effectfrom 1[St]“April 2010. 16.5: Of course, the Legislature hasgiven the effect from a specified date andapplied|the|SGAINtoA.Y.2O0I 0-1andsubsequentyears,thisprovisionbeingcurative in nature, its effect needs to be read|retrospectively in operation. Its very purpose|would not be sub-served, tf the effect 1s|limited to A. Y.2010-11 and subsequent yearsonly. Strict construction if leads to a result|not intended to be fulfilled by the object of|legislationand|anotherconstruction1S.possible apart from literal construction, thenthat construction needs to be preferred as|held in a decision in case of CIT V. Alom|Extrusion Limited [Supray|. 16.6: We also cannot be oblivious ofsubmissions not denied by the other side that)various representations were made to the|Finance Minister to bring about suitableamendment as the assessee otheriwise was losing genuine deduction of expenditure on|this count as also reflected in the speech of|Finance Minister so also in the memorandum|explaining the provision of the Finance Bill. 16.6: We also cannot be oblivious ofsubmissions not denied by the other side that)various representations were made to the|Finance Minister to bring about suitableamendment as the assessee otheriwise was losing genuine deduction of expenditure on|this count as also reflected in the speech of|Finance Minister so also in the memorandum|explaining the provision of the Finance Bill. 16.7: Giwing plain or natural meaning totheamendmentas|contendedby|theDepartment, uf is likely to create a situationenhancingthehardshipandadvance.discrimination, purposive and _ reasonablinterpretation is required to be given by the|Court. When plain interpretation frustrates|the very legislative intent, the Court i1sexpected to bear in mind the legislative intent|from the language used in the statue with thehelp of permissible tools of interpretation of|Statute. 17: The core issue as to whether the|amendment made by the Finance Act 2010 to|Section 40/a/(ia) of the Act is retrospective|from the date of insertion of the provision Lé., |"[Sf]‘April 2005 therefore needs to be answeredin affirmation. It can be seen that the|amendment made by the Finance Act 2010|allows additional time upto the due date of|fuing of the return in respect of even those.instances where TDS has been deducted|during the first eleven months of the previous|year. The additional time till the due date offling of the return, in case of TDS made.during the last month of the previous year|was already available by the amendment|made by Finance Act 2008. Thus, it is|apparent that the relaxation made by the|amendment made under the Finance Act,2010 brings the law in parity with theaforementioned situation and accordingly, for|the TDS deducted all throughout the year,|time is extended from payment till the filing ofreturn. It is thus apparent that when the|amendment introduced by the Finance Act,| 2008 of relaxing the time for deposit of TDSwas made retrospective from the year 2005|8"[Sf]~ April 2O05/, the amendment by FinanceAct 2010 with regard to other limb of time.limit for payment of TDS has to be held|retrospective not from 1[Sf]April 2010 only. Ifwe recall at this stage the speech of Finance|Minister while introducing this provision byway of Finance Act, 2010, this amendment|essentially has been brought for relaxing the|currentprovisionOrdisallowanceof|expenditure. The tax, lf is deducted at any|time during the financial year and paid before|the date offiling of the return, the Legislature|intendedTo allowdeductionOrsuchexpenditure with an intention to permitadditional time for most deductors upto|september of the next financial year. 17.1: We draw further support from thefact that the rigor of payment of interest isalso enhanced by increasing the _ interescharged on tax deducted, if any deposit by|the specified date t.e., up to the filing of the|return is not made, from 12% to 18% per'annum in the provision of Section 201 (1A). |Prior to the said amendment of Finance Act,2010 under Section 201 (1A), assessee was|liable to pay simple interest at one per cent|for every month or part of month, in case offailure to deduct tax on payment of deductedtax, increase 1s made correspondingly from|one per cent to one and halfper cent for everymonth or part of month for discouraging delayin deposit. AS|ightl ricontendedby|therespondents arithmetical discrepancy can be|welljudged from the fact that the rates of TDS|may vary between 1% to 10%, whereas,|legittmate business expenditure denied 1s|100% - resulting into taxation of gross receipts| coupled with levy of interest and penalty,|which would mean that the possibility cannot|be ruled out of business of the tax payer|getting closed down permanently, if there isabsence of any scope of claiming any|expenses in the next year. 7. Similar is the view expressed by the Delhi HighCourt in the cases ofCIT Vs. Oracle Software IndiaLimitedreportedin|293°ITR|page253,H.S.Mohindra Traders Vs. I.T.0., Ward 39 (2), NewDethi andCalcutta High Court tn the case of CIT Vs.Virgin Creations AS|ightl ricontendedby|therespondents arithmetical discrepancy can be|welljudged from the fact that the rates of TDS|may vary between 1% to 10%, whereas,|legittmate business expenditure denied 1s|100% - resulting into taxation of gross receipts| coupled with levy of interest and penalty,|which would mean that the possibility cannot|be ruled out of business of the tax payer|getting closed down permanently, if there isabsence of any scope of claiming any|expenses in the next year. 7. Similar is the view expressed by the Delhi HighCourt in the cases ofCIT Vs. Oracle Software IndiaLimitedreportedin|293°ITR|page253,H.S.Mohindra Traders Vs. I.T.0., Ward 39 (2), NewDethi andCalcutta High Court tn the case of CIT Vs.Virgin Creations 8. We are in the respectful agreement with the.view expressed by the Gujarat High Court in givingretrospective operationCO the said|amendment|notwithstanding that the parliament has expresslystated that it comes into effect from 01.04.2010. The'§said amendment is curative in nature. The tribunal|committed an error in holding it as prospective. Thesubstantial questions of law is answered in favour of theassesse and against the revenue. 9. Insofar as I.T.A.Nos.319/2009 and 3333/2012 are concerned, it is submitted that they are entitled tothe benefit even under the old provision. Therefore,notwithstandingthat|thesaid|provision1S.nowsubstituted by more liberal provision, they are alsoentitled to the benefit. We find no merits in these appeals and the same are dismissed accordingly. No costs. Sd/- JUDGE Sd/-. JUDGE| nvj