CIT vs. HS MOHINDRA TRADERS

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ITA - 77 / 2011HC Delhi17 January 20111 pages
For Petitioner: DEEPAK CHOPRA
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT had rightly interpreted Section 40(a)(ia) of the Income Tax Act. The court clarified that the relevant amendment to Section 40(a)(ia) was made by the Finance Act, 2008, effective from 01.05.2005. This amendment substituted the original wording with "has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-Section (1) of Section 200? of the Act." Therefore, the assessee's action of depositing the TDS in April 2007, which was before the due date for filing the return under Section 139(1), was in compliance with the amended provision. The court found no merit in the appeal.

What were the facts?

The assessee deducted tax at source (TDS) in March 2007 for expenditure incurred in February 2007. The deducted tax was deposited with the Income Tax Department in April 2007, which was before the due date for filing the return under Section 139(1) of the Income Tax Act. The Revenue challenged the decision of the Income Tax Appellate Tribunal (ITAT) which had allowed the assessee's claim. The High Court of Delhi was hearing an appeal against the ITAT's order.

What were the issues?

1. Whether the ITAT rightly interpreted Section 40(a)(ia) of the Income Tax Act, specifically sub-clause (A) thereof, concerning the deposit of TDS. The assessee contended that the ITAT wrongly relied on an amendment effective from 01.04.2010. The Revenue argued that Section 40(a)(ia) was amended by the Finance Act, 2008, with effect from 01.05.2005, substituting the relevant words to allow deposit of TDS in the subsequent year before the expiry of the time prescribed under Section 200(1) of the Act.

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 139(1),Section 200(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF DELHI AT NEW DELHI . 17.01.2011 . Present: Mr. Deepak Chopra, Advocate for the appellant. Mr. K.R. Manjani, Advocate for the respondent. . +ITA No.77/2011 . The assessee had deducted the tax at source in the month of March, 2007 for the expenditure incurred in February, 2007, but the same was deposited with the Income Tax Department in April, 2007, i.e. much before the due date specified in sub-section (1) of Section 139 of the Income Tax Act for filing the return. In these circumstances, we are of the opinion that the Income Tax Appellate Tribunal (hereinafter referred to as ?the Tribunal?) has rightly interpreted the provision of Section 40(a)(ia) and particularly, sub-clause (A) thereof which clearly gives the time to the assessee to deposit the TDS on or before the due date specified in sub-section (1) of Section 139 of the Act. The entire case sought to be made in this appeal is that the Tribunal wrongly relied upon the amendment which came into effect with effect from 01.04.2010. This is . . clearly erroneous inasmuch as Section 40 (a)(ia) was amended by the Finance Act, 2008 with effect from 01.05.2005 whereby the words ?on or before due date specified in sub-section (1) of Section 139? was substituted by the words ?has not been paid during the previous year, or in the subsequent year before the expiry of the time prescribed under sub-Section (1) of Section 200? of the Act. We, thus, find no merit in this appeal. This appeal is accordingly dismissed. . A.K. SIKRI, J. . M.L. MEHTA, J. JANUARY 17, 2011 pmc . . #5

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