Judgment:
ORDER
SHEET IN THE HIGH COURT AT CALCUTTA Special Jurisdiction [Income Tax].ORIGINAL SIDE ITAT No.126 of 2013 GA No.3461 of 2013 COMMISSIONER OF INCOME TAX, KOL-IV, KOL.
Versus M/S.PEERLESS HOSPITEX HOSPITAL AND RESEARCH CENTRE LTD.KOLKATA BEFORE: The Hon'ble JUSTICE GIRISH CHANDRA GUPTA The Hon'ble JUSTICE SUDIP AHLUWALIA Date : 30th April, 2014.
For Appellant : Mr.P.Dudharia, Advocate For Respondent : Mr.S.Bagchi with Mr.G.S.
Sharma, Advocates The Court : The subject matter of challenge in this appeal is a judgement and order dated 14th March, 2013 by which the learned Tribunal dismissed the appeal preferred by the revenue holding as follows: “We heard the rival submissions and carefully considered the same.
In our opinion, no interference is called for in the order of the CIT(A).The CIT(A) deleted the disallowance by following the decision of the Special Bench of the ITAT, Vishakhapatanam Bench in the case of Merilyn Shipping and Transport (supra).which is binding on us also.
We, therefore, dismiss the ground taken by the Revenue.” Aggrieved by the order, the revenue has come up in appeal contending that the judgment of the Special Bench of the Income Tax Appellate Tribunal in the case of Merilyn Shipping and Transport is no longer good law because this Court by an unreported judgment in the case CIT versus Crescent Export Syndicate (ITAT No.20 of 2013) held that the majority views expressed in the case of Merilyn Shipping and Transport were not acceptable.
Mr.Dudharia, learned advocate appearing on behalf of the appellant/revenue, submitted that the order of the learned Tribunal is bad and therefore, should be set aside.
The facts and circumstances of the case, briefly stated, are as follows: A sum of Rs.1,02,22,542/- was paid by the assessee on account of services to M/S.National Neuroscience Centre, in short NNC, pursuant to a memorandum of understanding.
The aforesaid payment was made without deducting any tax at source.
The assessing officer disallowed the aforesaid payment under Section 40(a)(ia) and added back the same to the income of the assessee.
The CIT (A) reversed the order of the assessing officer relying on the judgment of the Special Bench of the Income Tax Appellate Tribunal in the case of Merilyn Shipping and Transport without any discussion as to how did the judgment in the case of Merilyn Shipping and Transport help the assessee.
Aggrieved by the order of the CIT(A).the revenue preferred an appeal.
The learned Tribunal has endorsed the views of the CIT(A) and rejected the contention of the revenue.
It is in these facts that Mr.Dudharia submitted that the judgment of the learned Tribunal is altogether unmeritorious and should be set aside.
Mr.Bagchi, learned advocate appearing for the assessee, however, submitted that the aforesaid payment was made by the assessee to NNC who have got exemption under the law from payment of any tax and therefore, the tax was not deducted.
This question was not urged either before the assessing officer or before the CIT(A) or before the learned Tribunal.
Therefore, this question which evidently is a mixed question of law and fact cannot be raised for the fiRs.time before us.
Mr.Bagchi’s second submission was that the Supreme Court in the case of Allied Motors (P) LTD.versus CIT, reported in 224 ITR677 held that when any provision in a statute is introduced by way of a curative measure, the provision should be held to have a retrospective effect.
He submitted that the same view was reiterated by the Apex Court in the case of CIT versus Alom Extrusions Ltd., reported in 319 ITR306 He added that the second proviso to Section 40(a)(ia).introduced with effect from 1st April, 2013, should, therefore, be deemed to have a retrospective effect.
The second proviso to Section 40(a)(ia) is certainly intended to lessen the rigour of Section 40(a)(ia) in a case where the assessee is not deemed to be an assessee in default.
There is no factual background before us on the basis of which it can be said that it was ever the contention of the assessee that he could not in this case be considered as an assessee in default.
Therefore, the case of the assessee does not even come within the second proviso introduced with effect from 1st April, 2013.
We, as such, have no occasion to consider whether the aforesaid proviso is retrospective or can be held to be retrospective.
The contentions advanced by Mr.Bagchi are all without any merit and are, therefore, rejected.
The orders of the learned Tribunal and CIT(A).being patently contrary to the views expressed by this Court indicated above, are set aside.
The appeal is, thus, allowed.
(GIRISH CHANDRA GUPTA, J.) (SUDIP AHLUWALIA, J.) sm AR[CR].