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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: Shri D T Garasia & Shri N K Pradhan
O R D E R Per D T Garasia, Judicial Member:
This appeal has been filed by the Revenue against the order of CIT(A)- 3, Mumbai, dated 27.12.2016, relating to assessment year 2012-13. The Revenue has raised the following grounds:
“1. "On the facts and in the circumstances of the case and in law, the ld.CIT(A) erred in deleting the disallowance u/s 40(a)(i) despite the assessee not deducting the TDS within the time and that the amendment to section 40(a)(i) through Finance (No.2) Act, 2014 is not retrospective.
M/s.Quikjet Cargo Airlines Pvt. Ltd
For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the, AO restored.” 2. The short facts of the case are as under:
The Assessing Officer while passing the assessment order, added an amount of `.1,56,05,070/- in respect of legal and professional charges paid to M/s. Cardinal Aviation Singapore Pvt Ltd and part of lease rent paid to M/s Farnair Sitzerland AG u/s. 4o(a)(ai), to the total income of the assessee.
When the matter was carried before the CIT(A), the CIT(A) has allowed the claim of the assessee observing as under:
“6.3 The appellant further submitted that the approval of RBI for making payment to the non-resident was received in November 2012 and on receipt of approval from RBI, the appellant immediately paid the TDS in the month of November 2012. It is a reasonable cause for payment of TDS late. There is an amendment in section 40(a)(i) of the Act which enables a taxpayer to pay the TDS in respect of payment to a non-resident before the due date of filing of the return of income. This amendment is brought in by Finance (No.2) Act, 2014, with effect from 1st April 2015. Considering the rational given in the Memorandum to the Finance (No.2) Bill, 2014, it is submitted that the amended provision is effective retrospectively. Without prejudice, it is further stated that otherwise it would amount for discrimination and such discrimination has held to be not allowable. The payment of TDS is made before the due date of filing the return of income for A.Y. 2012-13. In view of the above, it is submitted that the amount of `.1,39,72,548/- being legal and professional charges paid to M.s Cardinal Aviation Singapore P Ltd be allowed as deduction in A.Y. 2012-13. 6.4 I have carefully considered the rival submissions and facts of the case. The appellant has deducted the tax within the time and paid the same before the due date for filing return of income in M/s.Quikjet Cargo Airlines Pvt. Ltd the case of non-resident assessee. In view of the same, Ground No.1 is allowed. 3. We have heard the rival contention of both the parties. We find that the CIT(A) while deleting the addition has observed that the assessee has immediately made payment of TDS on receipt of approval from RBI for non- residents in November 2012. It is a reasonable cause for delay in payment of TDS. There is an amendment in section 40(a)(i) of the Act which enables a taxpayer to pay the TDS in respect of payment to a non-resident before the due date of filing of the return of income. This amendment is brought in by Finance (No.2) Act, 2014, with effect from 1st April 2015. Considering the rational given in the Memorandum to the Finance (No.2) Bill, 2014, it is submitted that the amended provision is effective retrospectively. The payment of TDS is made before the due date of filing the return of income.
Therefore, the CIT(A) has deleted the addition.
The learned DR did not bring any contrary facts before us. We therefore, endorse the action of the CIT(A) and the appeal of the Revenue is dismissed.
Order pronounced in the open court on 22nd day of September, 2017.