HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 26 / 2012 Commissioner of Income Tax, Ajmer ----Appellant Versus M/S Asian Construction Company, 716/A, 3rd Street Bihari Ganj, Ajmer (Raj.) ----Respondent For Appellant(s) : Mrs. Parinitoo Jain with Ms. Shiva Goyal For Respondent(s) : Mr. Gunjan Pathak with Ms. Ishita Rawat HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 30/08/2017 1. By way of this appeal, department has challenged judgment and order of tribunal whereby tribunal has allowed appeal preferred by assessee. 2. This court while admitting appeal on 19.03.2012 has framed following substantial questions of law:- 1. Whether Tribunal was legally justified in reversing findings of CIT(A) and holding that assessee had deducted tax at source and deposited it in accordance to Chapter XVII and Section 194C and no disallowance was to be made u/s 40(a)(ia)? 2. Whether Tribunal was legally justified in reversing findings of CIT(A) and holding that assessee was entitled for payment of Rs.1,01,50,000/- made to sub contractors without deducting TDS according to Section 40(a)(ia) r/w 194C? (2 of 19) [ITA-26/2012] 3. Counsel for appellant has taken us to order passed by A.O. and contended that A.O. while considering mater in detail observed as under:- S. Name Gross TDS Profit Net Opening Net Amount Total Closing No amount balance amount after amount Balance Amount . payable as on paid 28.02.2009 paid 01.04.06 upto including 08.02.20 opening 07 balance 1. Poonam Gupta 1047590 10685 31428 1005477 -45750 104250 850000 954250 51227 & Sons. 2. Pushpendra 1340570 13673 40217 1286680 -331120 518550 400000 918550 368130 3. Rajesh Sharma 1298640 13246 38959 1246435 -32057 1217943 0 1217943 28492 4. Ramesh Bagri 896960 9149 26909 860902 53302 250000 400000 650000 210902 5. Deva Gurjar 1370550 13980 41117 1315453 12785 0 1200000 1200000 115453 6. Ashok Singhal 1267310 12927 38019 1216364 -36748 1163522 0 1163522 52842 7. Moti Lal 1305058 13312 39152 1252594 -384563 865437 0 865437 387157 8. Ashish Gour 1303792 13299 39114 1251379 -27059 1172941 0 1172941 78438 9. Gajendra Gahlot 1238045 12628 37141 1188276 -17678 432322 750000 1182322 5954 10 Rahul Sharma 1247645 12726 37429 1197490 -324083 875917 551834 1427751 -230261 . Total 12316160 125625 369485 1182105 -1132971 6600882 4151834 10752716 1068334 0 It was required from assessee that why TDS on such sub contractors has not been deposited in case of payments made upto 28.02.2007 as per in accordance with provisions of law and why provisions of section 40(a) (ia) of Income-tax Act, 1961 may not be applied on such payments made upto 28.02.2007 but amount of TDS deposited after 31.03.2007. On going through details and on verification of such third parties/sub contractors u/s 133(6) of Income-tax Act, 1961 copies of accounts as furnished clearly discloses payments made to such sub contractors and assessee was liable to deduct tax at source upon payment made upto 28.02.2007 in accordance with (3 of 19) [ITA-26/2012] Chapter XVIIB of Incom-tax Act, 1961 as per Section 194C and since assessee has made payments to such sub contractors before 28.02.2007 and no TDS deducted nor paid in govt. account uptill 31.03.2007 hence provision of section 40(a)(ia) of income-tax Act, 1961 are clearly applicable to extent of payments made upto 28.02.2007 to such sub contractors. 4. view taken by A.O. is confirmed by CIT(A) observing thus:- 3.3 Argument of appellant have been carefully considered, but same is not acceptable. Section 40(a)(ia) of I.T. Act reads as follows:- Any interest, commission or brokerage, (Rent, royalty,) fees for professional services or fess for technical services payable to being resident, or amounts payable to contractor or sub- contractor, being resident, for carrying out any work (including supply of labour for carrying our any 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,- (A) in case where tax was deductible and was so deducted during last month on previous year, on or before due date specified in sub section (1) of section 139; or (B) in any other case, or of before last day of previous year: Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted- (A) during last month of previous year but paid after said due date; or (B) during any other month of previous year but paid after end of said previous year, Such sum shall be allowed as deduction in computing income of previous year in which such tax has been paid. 3.4 From language of section 40(a)(ia), it is clear that only where tax was deductible during last month and was actually deducted during last month of previous year, allowance has to be made if amount is deposited before (4 of 19) [ITA-26/2012] due date of filing of return. In case of appellant, sum was deducted during last month but it was notj deductible in that month. sum was deductible in earlier months of years. appellant however actually deducted amount only during last month. In such situation his case falls in category B of above para i.e. in any other case on or before last date of previous year . Therefore, TDS for such earlier months was to be deposited only before end of previous year for claiming respective amount ad deduction during year. Argument of appellant that since he has deducted tax in last month i.e. March 2007 and deposited same before due date of filing of return, his case is covered in category of above para is not acceptable. 3.5 argument of appellant that section 40(a)(ia) laid conditions for allowability of deduction and provisions of section 194C are relevant only for purpose of ascertaining deductibility of tax on payments is fallacious. If this argument is accepted, then deductor who dutifully deducts tax during year in various months, but due to some reason is not able to deposit same before end of year will be at disadvantage, because in his case respective payments will not be allowed as deduction. While on other hand deductor who does not deduct tax during year (even though same was deductible) and makes deduction only during last month will be in advantageous position, because according to argument of appellant, in his case respective payments will be allowed as deduction, even if payment if made after end of year, but before due date of filing of return. Obviously this can never be intention of legislature. This itself proves fallacy of argument of appellant. 3.6 As mentioned earlier, in this case tax was deductible in various months of year. Appellant failed to deduct tax in time. He deducted tax only during last month. In such situation disallowance of Rs.1,01,50,000/- made by AO u/s 40(a)(ia) is justified and same is confirmed. (5 of 19) [ITA-26/2012] 5. Therefore, he contended that Tribunal has seriously committed error in reversing view taken by AO and CIT(A). 6. However, counsel for respondent relied upon decision of Tribunal which reads as under:- 2.8 We have heard both parties. issue before us is covered by order of Tribunal in case of Inder Prasad Mathura Lal vs ITO(supra). It will be useful to reproduce relevant para as under:- 3.8 amendment has been made in Section 40a(ia) which says that expenditure is not to be disallowed if tax at source has been paid on or before due date specified in Section 139(1) of Act. proviso has also been inserted to say that expenditure will not be allowable in case TDS has been deposited after due date of return provided in Section 139(1) of Act. If amendment is curative or where it is intended to remedy unintended consequence or to render statuary provisions workable , amendment is to be construed to relate back to provisions in respect of which it applies to remedy. In following cases, amendments have been held as retrospective though such retrospective was not mentioned by this legislature while introducing such provisions. 1. Allied Motors (P) Ltd. Vs. CIT, 139 CTR 364 (SC) amendment by Finance Act, 1987 in respect of insertion of first proviso to Section 43B was held as curative in nature and same was given retrospective effect from date of inception of Section 43A. 2. CIT Vs. Alom Extrusions Ltd. , 319 ITR 306 (SC) amendment by Finance Act , 2003 for bringing about uniformity about payment in tax, duty, ceee and fee with contribution to welfare funds was held as curative in nature and held applicable retrospectively w.e.f. 01-04-1988. (6 of 19) [ITA-26/2012] 3. CIT Vs. Poddar Cement (P) ltde, 226 ITR 625 By Finance Bill, 1987, meaning and expression of house property in Section 27 was enlarged. Hon'ble Apex Court in this case held that amendment was intended to supply obvious omission or to clear up doubts as to meaning of word owner . 4. CIT Vs. Vs. Gold Coin Health Food (P) Ltd., 304 ITR 308 (SC) There was amendment in explanation 4 to Section 271(1)( c) by Finance Act , 2002,. This explanation was not held as clarificatory by Hon'ble Apex Court in case of Virtual Soft Systems Ltd. Vs. CIT , 207 CTR 733. However, larger bench held that amendment was intended to make clear which was otherwise implied and explicit. Hence it was held that penalty in loss case is also leviable even in prior to 01- 04- 2003. 3.9 amendment in Section 40a((ia) has been held as curative in following cases:- 1. Kanubhai Ramjibhai Vs. ITO 135 ITD 364 (Ahd,) 2. Bansal Parvahan India (P) Ltd. Vs. ITO 137 TTJ 319 (Mum) 3.10 Hence, addition of Rs. 4,61,638/- is required to be deleted on account of amendment in Section 40a(ia) by treating same as curative. 2.9 Before amendment by Finance Act, proviso stated that any sum on which tax has been deducted during last month of previous year but paid before due date then disallowance u/s 40(a) (ia) of Act cannot be made. proviso refers to deduction of tax at source in last month and it does not state in respect of tax which are deductible earlier but has not been deducted in earlier month. If tax has been deducted in any month other then last month is month of previous year then expenditure covered u/s 40(a)(ia) of Act will not be admissible unless such (7 of 19) [ITA-26/2012] tax was paid before end of previous year. In instant case, it is undisputed that assessee has deducted tax at source in last month. Therefore, disallowance was not required to be made u/s 40(a)(ia) of Act. Before us, ld. AR has filed copy of TDS return showing payment of TDS in month of May 2007. Hence, we hold that ld. CIT(A) was not justified in confirming addition of Rs. 1,01,50,000. 7. Counsel for appellant has relied upon decision of High Court of Delhi in case of Commissioner of Income Tax Vs. Naresh Kumar reported in (2014) 326 ITR 0256 (Delhi) wherein it has been held as under:- 28. It is, in this context, that we had in Rajinder Kumar's case (supra) observed as under: "22. Now, we refer to amendments which have been made by Finance Act, 2010 and effect thereof. We have already quoted decision of Calcutta High Court in Virgin Creations (supra). said decision refers to earlier decision of Supreme Court in case of Allied Motors (P) Limited (supra) and Commissioner of Income Tax versus Alom Extrusions Limited, (2009) 319 ITR 306 (SC). In case of Allied Motors (P) Limited (supra), Supreme Court was examining first proviso to Section 43B and whether it was retrospective. Section 43B was inserted in Act with effect from 1st April 1984 for curbing claims of taxpayers who did not discharge or pay statutory liabilities but claimed deductions on ground that statutory liability had accrued. Section 43Bstates that statutory liability would be allowed as deduction or as expense in year in which payment was made and would not be allowed, even in cases of mercantile system of accountancy, in year of accrual. It was noticed that in some cases hardship would be caused to assessees, who paid statutory (8 of 19) [ITA-26/2012] dues within prescribed period though payments so made would not fall within relevant previous year. Accordingly, proviso was added by Finance Act, 1987 applicable with effect from 1st April, 1988. proviso stipulated that when statutory dues covered by Section 43B were paid on or before due date for furnishing of return under Section 139(1), deduction/expense, equal to amount paid would be allowed. Supreme Court noticed purpose behind proviso and remedial nature of insertion made. Of course, Supreme Court also referred to Explanation 2 which was inserted by Finance Act, 1989 which was made retrospective and was to take effect from 1st April, 1984. Highlighting object behind Section 43B, it was observed that proviso makes provision workable, gives it reasonable interpretation. It was elucidated: "12. In case of Goodyear India Ltd. V. State of Haryana this Court said that rule of reasonable construction must be applied while construing statute. Literal construction should be avoided if it defeats manifest object and purpose of Act. 13. Therefore, in well-known words of Judge Learned Hand, one cannot make fortress out of dictionary; and should remember that statutes have some purpose and object to accomplish whose sympathetic and imaginative discovery is surest guide to their meaning. In case of R.B. Judha Mal Kuthiala v. CIT, this Court said that one should apply rule of reasonable interpretation. Aproviso which is inserted to remedy unintended consequences and to make provision workable, proviso which supplies obvious omission in section and is required to be read into section to give section reasonable interpretation, requires to be treated as retrospective in operation so that reasonable interpretation can be given to section as whole. (9 of 19) [ITA-26/2012] 14. This view has been accepted by number of High Courts. In case of CIT v. Chandulal Venichand, Gujarat High Court has held that first proviso to Section 43-B is retrospective and sales tax for last quarter paid before filing of return for assessment year is deductible. This decision deals with Assessment Year 1985-85. Calcutta High Court in case of CIT v. Sri Jagannath Steel Corpn. has taken similar view holding that statutory liability for sales tax actually discharged after expiry of accounting year in compliance with relevant statute is entitled to deduction under Section 43-B. High Court has held amendment to be clarificatory and, therefore, retrospective. Gujarat High court in above case held amendment to be curative and explanatory and hence retrospective. Patna High court has also held amendment inserting first proviso to be explanatory in case of Jamshedpur Motor Accessories Stores v. Union of India. special leave petition from this decision of Patna High Court was dismissed. view of Delhi High Court, therefore, that first proviso to Section 43-B will be available only prospectively does not appear to be correct. As observed by G.P. Singh in his Principles of Statutory Interpretation, 4th Edn. At p. 291: "It is well settled that if statute is curative or merely declaratory of previous law retrospective operation is generally intended." In fact amendment would not serve its object in such situation unless it is construed as retrospective. view, therefore, taken by Delhi High Court cannot be sustained." 23. Section 43B deals with statutory dues and stipulates that year in which payment is made same would be allowed as deduction even if assessee is following mercantile system of accountancy. proviso, however, stipulates that deduction would be allowed where statutory dues covered by Section 43Bstand paid on or before due date of filing of return of income. Section 40(a)(ia)is (10 of 19) [ITA-26/2012] applicable to cases where assessee is required to deduct tax at source and fails to deduct or does not make payment of TDS before due date, in such cases, notwithstanding Sections 30 to 38 of Act, deduction is to be allowed as expenditure in year of payment unless case is covered under exceptions carved out. amended proviso as inserted by Finance Act, 2010 states where assessee has made payment of TDS on or before due date of filing of return under Section 139(1), sum shall be allowed as expense in computing income of previous year. two provisions are akin and provisos to Sections 40(a) (ia) and 43B are to same effect and for same purpose. 24. In Podar Cement Private Limited (supra), Supreme Court considered whether term owner would include unregistered owners who had paid sale consideration and were covered by Section 53A of Transfer of Property Act. contention of assessees was that amendments made to definition of term owner by Finance Bill, 1987 should be given retrospective effect. It was held that amendments were retrospective in nature as they rationalise and clear existing ambiguities and doubts. Reference was made to Crawford: Statutory Construction and principle of Declaratory Statutes , Francis Bennion: Statutory Interpretation , Justice G.P. Singh s Principles of Statutory Interpretation , it was observed that sometimes amendments are made to supply obvious omission or to clear up doubts as to meaning of previous provision. issue was accordingly decided holding that in such cases amendments were retrospective though it was noticed that as per Transfer of Property Act, Registration Act, etc. legal owner must have registered document. 25. In view of aforesaid discussion in paras 18,19 and 20, it is apparent that respondent (11 of 19) [ITA-26/2012] assesse did not violate unamended section 40(a)(ia) of act. We have noted ambiguity and referred their contention of Revenue and rejected interpretation placed by them. amended provisions are clear and free from any ambiguity and doubt. They will help curtail litigation. amended provision clearly support view taken in paragraphs 17- 20 that expression "said due date" used in clause of proviso to unamended section refers to time specified in Section 139(1) of Act. amended section 40(a)(ia) expands and further liberalises statue when it stipulates that deductions made in first eleven months of previous year but paid before due date of filing of return, will constitute sufficient compliance." 29. In view of aforesaid discussion, we do not find any merit in present appeals filed by Revenue and they are dismissed. 8. He further relied on another decision of High Court of Delhi in case of Commissioner of Income Tax Vs. Harish Chand Ahuja reported in (2015) 280 CTR 0403 (Raj.) wherein it has been held as under:- 11. Division Bench of Gujarat High Court while examining question in terms that whether Income Tax Appellate Tribunal was justified in deleting addition of Rs. 23,13,933/-, relying upon amendment made in Section 40[a](ia) of Income Tax Act, 1961 by Finance Act, 2010 and thereby giving it retrospective effect, after taking into consideration facts noticed above arrived at conclusion that amendment made in Section 40[a](ia) of Income Tax Act, 1961 by Finance Act, 2010 is retrospective in operation i.e. from date of insertion of Section 40[a](ia) of Act. conclusion aforesaid was arrived by discussing entire issue as under:- "16.5 Of course, Legislature has given effect from specified date and applied same to A.Y. 2010-11 and subsequent years, this provision (12 of 19) [ITA-26/2012] being curative in nature, its effect needs to be read retrospectively in operation. Its very purpose would not be subserved, if effect is limited to A.Y. 2010-11 and subsequent years only. Strict construction if leads to result not intended to be fulfilled by object of legislation and another construction is possible apart from literal construction, then that construction needs to be preferred as held in decision in case of CIT v. Alom Extrusion Limited [Supra]. 16.6 We also cannot be oblivious of submissions not denied by other side that various representations were made to Finance Minister to bring about suitable amendment as assessee otherwise was losing genuine deduction of expenditure on this count as also reflected in speech of Finance Minister so also in memorandum explaining provision of Finance Bill. 16.7 Giving plain or natural meaning to amendment as contended by Department, if is likely to create situation enhancing hardship and advance discrimination, purposive and reasonable interpretation is required to be given by Court. When plain interpretation frustrates very legislative intent, Court is expected to bear in mind legislative intent from language used in statue with help of permissible tools of interpretation of statute. 17. core issue as to whether amendment made by Finance Act 2010 to Section 40[a](ia) of Act is retrospective from date of insertion of provision i.e., 1st April 2005 therefore needs to be answered in affirmation. It can be seen that amendment made by Finance Act 2010 allows additional time upto due date of filing of return in respect of even those instances where TDS has been deducted during first eleven months of previous year. additional time till due date of filing of return, in case of TDS made (13 of 19) [ITA-26/2012] during last month of previous year was already available by amendment made by Finance Act 2008. Thus, it is apparent that relaxation made by amendment made under Finance Act, 2010 brings law in parity with aforementioned situation and accordingly, for TDS deducted all throughout year, time is extended from payment till filing of return. It is thus apparent that when amendment introduced by Finance Act, 2008 of relaxing time for deposit of TDS was made retrospective from year 2005 [1st April 2005], amendment by Finance Act 2010 with regard to other limb of time limit for payment of TDS has to be held retrospective not from 1st April 2010 only. If we recall at this stage speech of Finance Minister while introducing this provision by way of Finance Act, 2010, this amendment essentially has been brought for relaxing current provision on disallowance of expenditure. tax, if is deducted at any time during financial year and paid before date of filing of return, Legislature intended to allow deduction on such expenditure with intention to permit additional time for most deductors upto September of next financial year. 17.1 We draw further support from fact that rigor of payment of interest is also enhanced by increasing interest charged on tax deducted, if any deposit by specified date i.e., up to filing of return is not made, from 12% to 18% per annum in provision of Section 201(1A). Prior to 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 of failure to deduct tax on payment of deducted tax, increase is made correspondingly from one per cent to one and half per cent for every month or part of month for discouraging delay in deposit. 17.2 As rightly contended by respondents arithmetical discrepancy can (14 of 19) [ITA-26/2012] be well judged from fact that rates of TDS may vary between 1% to 10%, whereas, legitimate business expenditure denied is 100% resulting into taxation of gross receipts coupled with levy of interest and penalty, which would mean that possibility cannot be ruled out of business of tax payer getting closed down permanently, if there is absence of any scope of claiming any expenses in next year. 17.3 It can be thus seen that amendment to Section 40[a](ia) by Finance Act, 2010 is only amendment in continuation of earlier amendment made in Finance Bill, 2008 with retrospective effect from 1st April 2005. Legislature, while extending time for payment of TDS deducted in month of March till due date of filing of return under section 139(1) of Act, considered apparent difference where unintended benefit was given to assessee who deducted entire year's TDS in month of March of previous year which were eligible to pay TDS so deducted to Government by due date of filing of return under Section 139(1) of Act. However, assesses who may have deducted tax in earlier months beginning from April to end of February of previous year, did not get such benefit of extended time and thus same worked unreasonably for such assesses, and therefore, it can be safely held upholding contention of respondents that to cure such defect, amendment in year 2010 has been brought and benefit of extended time to avoid hardship was given to assessee and therefore, amendment of 2010 is in continuation to amendment of 2008, and therefore, curative in nature and same has to be held retrospective i.e., with effect from 1st April 2005." 9. Counsel for appellant has also relied on decision of High Court of Karnataka in case of Commissioner of Income (15 of 19) [ITA-26/2012] Tax Vs. Santosh Kumar Shetty reported in (2014) 89 CCH 0199 KarHC wherein it has been held as under:- 5. argument of Revenue is, when Finance Act, 2010, expressly states that said provision would come into effect from 01.04.2010, it is not permissible for Tribunals or Courts to give it retrospective effect prior to date and therefore, it is submitted that order passed by Tribunal holding it as retrospective notwithstanding fact that parliament made its intention clear by declaring that it comes into effect from 01.04.2010. Therefore, impugned orders are liable to be set aside. 6. This question came up for consideration before Gujarat High Court in case of Commissioner of Income Tax, Ahmedabad IV Vs. Om Prakash R Chaudhary in Tax Appeal Nos.412/2013 and connected matter, which came to be decided on 22.11.2013, after referring to judgments of Alide Motors (P.) Ltd. Vs. CIT reported in AIR 1997 SC 1361 and CIT Vs. Alom Extrusions Limited reported in (2009) 319 ITR 306, has held as under: "15.4: Thus, considering relevant legislative changes made by Parliament from time to time and some of decisions relevant to consider question of retrospectivity raised in these present appeals, focal question, therefore, would be whether amendment brought about by way of Finance Act 2010 in Section 40 [a](ia) with effect from 1st April 2010 could be said to be clarificatory in nature for attending to unintended consequences, and therefore, is having retrospective effect from 1st April 2005. 16: closer examination needs to be done as to whether amended provision aims to expand prevailing position and whether same being in nature of curative, retrospectivity of same is permissible as is being contended for and on behalf of assessee. At this stage, therefore, true effect of such amendment needs to be discerned. 16.1: It is demonstrated before us that TDS provision caused unintended inexplicable situation whereby assessee who deducted tax at source from payments made by it for and on behalf of Government and then if misses out time limit of depositing same (16 of 19) [ITA-26/2012] with Treasury within time prescribed, amount spent for its business purposes on account of late deposit of such tax would result into disallowance of entire expenditure under Section 40[a](ia). said proviso thereby caused immense hardship. amendment under consideration made by Finance Act 2010 relaxes rigors of such provision by permitting payment of Tax till filing of return as provided under sub-section (1) of Section 139 of Act. 16.2: One can notice that object of brining about provision of Section 40(a)(ia) in year 2005 - 06 was to augment compliance of TDS provision. TDS either not deducted or deducted but not paid in respect of payment of interest, commission or brokerage etc., before expiry of time prescribed under sub-section (1) of Section 200 and in accordance with other provisions of Chapter XVII, such amount shall not be deducted in computing 'income' chargeable under head 'Profit & Gains' of business or profession. Such provision starts with non obstante clause which states that notwithstanding anything contained in Section 30to 38 of Income-tax Act, if tax deducted at source is not paid within prescribed time [under Section 200 (1)], no amount could be deducted while computing income, under Chapter IV of 'computation of business income'. 16.3: Thereafter, by way of amendment of Finance Act, 2008, further amendment was made whereby TDS deductible and deducted in last month of previous year if was not paid till due date of filing of return under sub- section (1) of Section 139 and in any other case, on or before last day of previous year, Section 40(a)(ia) provided for disallowance of expenses like interest, commission, brokerage, etc. 16.4: Since, this had created anomaly, whereby tax deducted in last month was permitted payment till filing of return as per sub-section (1) of Section 139 whereas for TDS deducted during rest of months, period was provided only till 31st March of previous year, Finance Act, 2010 was brought. To bring parity, to remedy unintended consequences and to make provision workable, it proposed to amend said provision and provided inter alia that no disallowance would be made if after deduction of tax during previous year, same has been (17 of 19) [ITA-26/2012] paid on or before due date of filing of return of income as specified in sub-section (1) of Section 139. This has been given retrospective effect from 1st April 2010. 16.5: Of course, Legislature has given effect from specified date and applied same to A.Y.2010-11 and subsequent years, this provision being curative in nature, its effect needs to be read retrospectively in operation. Its very purpose would not be sub-served, if effect is limited to A.Y.2010-11 and subsequent years only. Strict construction if leads to result not intended to be fulfilled by object of legislation and another construction is possible apart from literal construction, then that construction needs to be preferred as held in decision in case of CIT V. Alom Extrusion Limited [Supra]. 16.6: We also cannot be oblivious of submissions not denied by other side that various representations were made to Finance Minister to bring about suitable amendment as assessee otherwise was losing genuine deduction of expenditure on this count as also reflected in speech of Finance Minister so also in memorandum explaining provision of Finance Bill. 16.7: Giving plain or natural meaning to amendment as contended by Department, if is likely to create situation enhancing hardship and advance discrimination, purposive and reasonable interpretation is required to be given by Court. When plain interpretation frustrates very legislative intent, Court is expected to bear in mind legislative intent from language used in statue with help of permissible tools of interpretation of statute. 17: core issue as to whether amendment made by Finance Act 2010 to Section 40[a](ia) of Act is retrospective from date of insertion of provision i.e., 1st April 2005 therefore needs to be answered in affirmation. It can be seen that amendment made by Finance Act 2010 allows additional time upto due date of filing of return in respect of even those instances where TDS has been deducted during first eleven months of previous year. additional time till due date of filing of return, in case of TDS made during last month of previous year was already available by amendment made (18 of 19) [ITA-26/2012] by Finance Act 2008. Thus, it is apparent that relaxation made by amendment made under Finance Act, 2010 brings law in parity with aforementioned situation and accordingly, for TDS deducted all throughout year, time is extended from payment till filing of return. It is thus apparent that when amendment introduced by Finance Act, 2008 of relaxing time for deposit of TDS was made retrospective from year 2005 [1st April 2005], amendment by Finance Act 2010 with regard to other limb of time limit for payment of TDS has to be held retrospective not from 1st April 2010 only. If we recall at this stage speech of Finance Minister while introducing this provision by way of Finance Act, 2010, this amendment essentially has been brought for relaxing current provision on disallowance of expenditure. tax, if is deducted at any time during financial year and paid before date of filing of return, Legislature intended to allow deduction on such expenditure with intention to permit additional time for most deductors upto September of next financial year. 17.1: We draw further support from fact that rigor of payment of interest is also enhanced by increasing interest charged on tax deducted, if any deposit by specified date i.e., up to filing of return is not made, from 12% to 18% per annum in provision of Section 201 (1A). Prior to 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 of failure to deduct tax on payment of deducted tax, increase is made correspondingly from one per cent to one and half per cent for every month or part of month for discouraging delay in deposit. As rightly contended by respondents arithmetical discrepancy can be well judged from fact that rates of TDS may vary between 1% to 10%, whereas, legitimate business expenditure denied is 100% - resulting into taxation of gross receipts coupled with levy of interest and penalty, which would mean that possibility cannot be ruled out of business of tax payer getting closed down permanently, if there is absence of any scope of claiming any expenses in next year. (19 of 19) [ITA-26/2012] 10. We have heard both sides. 11. Taking into consideration observations made by Tribunal as reproduced hereinabove and in view of decision of this court as referred (supra), view taken by Tribunal is required to be confirmed. 12. Therefore, issues is required to be answered in favour of assessee against department. 13. appeal stands dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Jyoti Item No.29 Commissioner of Income-tax, Ajmer v. Asian Construction Company