Sh. Gurmeet Singh, Chandigarh V. Addl. CIT, Chandigarh

ITA 319/CHANDI/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86199 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 25-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: A K JINDAL
• Keywords: Search and seizure; Period of limitation; Question of law; Non passing of speaking order; Right to appeal
• Section: 14A; 194C; 56; 12; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 319/CHD/2011 ASSESSMENT YEAR: 2007-08 SHRI GURMEET SINGH VS THE ACIT, SCO 67, SECTOR 20-C, RANGE-III, CHANDIGARH. CHANDIGARH. PAN: ADYPS3630D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A.K.JINDAL RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 16.02.2015 DATE OF PRONOUNCEMENT : 13.03.2015 O R D E R PER T.R.SOOD, ACCOUNTANT MEMBER IN THIS APPEAL, REVENUE HAS RAISED THE FOLLOWING GROUNDS : 1. A) THAT THE LD. CIT (A) IS NOT JUSTIFIED IN UPHOLDIN G THE DISALLOWANCE OF RS. 41,22,721/- U/S. 40 (A) (IA) UND ER THE FACTS & CIRCUMSTANCES OF THE CASE. B) THAT THE APPELLANT DISPUTES THE QUANTUM OF ADDITION MADE. 2. THAT THE LD. CIT (A) IS NOT JUSTIFIED IN UPHOLDING THE DISALLOWANCE OF RS. 25,386/- MADE BY THE ASSESSING AUTHORITY U/S. 14-A OF THE I. T. ACT READ WITH RULE 8-D UNDER THE FACTS & CIRCUMSTANCES OF THE CASE. 2. AFTER HEARING BOTH THE PARTIES, WE FIND THA T DURING ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT ASSES SEE HAS PAID 2 INTEREST TO THE FOLLOWING PARTIES : S.NO. NAME OF THE BANK AMOUNT 1 CENTURIAN BANK OF PUNJAB LTD. 18,47,710 2. L & T FINANCE 27,62,573 3. SREI INFRASTRUCTURE 8,79,705 4. SUNDRAM FINANCE( 01.04.06 TO 16.10.06) 2 ,49,713 5. -DO- ( 17.10.06 TO 31.03. 07) 7,81,327 6. TATA MOTORS LTD 86,538 7. KOTAK MAHINDRA PRIME LTD. 1,44,192 67,51,758 3. THE ASSESSEE WAS SPECIFICALLY ASKED WHETHER T DS ON INTEREST PAID TO NON-BANKING FINANCE COMPANIES EXCE PT CENTURIAN BANK OF PUNJAB AND SUNDRAM FINANCE (FROM 17.10.2006 TO 31.03.2007) HAS BEEN DEDUCTED OR NOT ? IT WAS ADMITTED THAT TDS HAS NOT BEEN DEDUCTED. THE ASSES SING OFFICER WAS OF THE OPINION THAT ASSESSEE WAS REQUIR ED TO DEDUCT THE TDS BECAUSE ABOVE ORGANIZATIONS WERE NOT COVERE D BY ANY OF THE EXCEPTIONS PROVIDED IN SECTION 194A(3)(III) OF THE ACT. THEREFORE, EXCEPT FOR CENTURIAL BANK, WHICH WAS COV ERED BY THE EXCEPTION BEING A BANKING COMPANY AND SUNDRAM FINAN CE WHO HAD OBTAINED THE CERTIFICATE UNDER SECTION 197(1), THE ASSESSEE WAS REQUIRED TO DEDUCT TAX FROM OTHER ORGANIZATIONS . SINCE TAX HAD NOT BEEN DEDUCTED, THEREFORE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT AND DISA LLOWED THE SUM OF RS. 41,22,721/-. 4. ON APPEAL, IT WAS MAINLY SUBMITTED THAT ASSESS EE HAD BASICALLY PAID THE HIRE PURCHASE CHARGES TO VARIOUS FINANCE COMPANIES AND THEREFORE, TAX WAS NOT REQUIRED TO BE DEDUCTED. ALTERNATIVELY, IT WAS CONTENDED THAT SINCE INTEREST HAS BEEN PAID TO ALL THE PARTIES,THEREFORE, PROVISIONS OF SECTION 40(A)(IA) WERE NOT 3 APPLICABLE IN VIEW OF THE SPECIAL BENCH DECISION IN CASE OF MERILYN SHIPPING & TRANSPORTS VS ACIT IN I.T. APPEA L NO. 477(VIZ) OF 2008 DATED 29.03.2012. 5. THE LD. CIT(APPEALS) CONSIDERED THE RIVAL SU BMISSIONS AND DID NOT FIND ANY FORCE IN THEM. HE REFERRED TO CIR CULAR NO. 738 DATED 25.03.1996 AND CIRCULAR NO. 760 DATED 13.01.1 998 AND OBSERVED THAT THE AGREEMENTS ENTERED INTO BY THE AS SESSEE WERE NOT HIRE-PURCHASE AGREEMENTS BECAUSE ASSESSEE WAS T HE OWNER OF THE ASSETS WHICH HAVE BEEN REFLECTED IN THE BALA NCE SHEET. THEREFORE, ASSESSEE WAS REQUIRED TO DEDUCT THE TDS AND ACCORDINGLY, HE CONFIRMED THE ADDITION. 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION IN THE CA SE OF ASSESSEE FOR ASSESSMENT YEAR 2006-07 AND THERE THE JUDGEMENT OF THE SPECIAL BENCH IN CASE OF MERILYN SHIPPING & TRANSPORTS VS ACIT (SUPRA) WAS NOT ACCEPTED BECAUSE OF THE LATER DECIS ION OF HON'BLE CALCUTTA HIGH COURT IN CASE OF CRESCENT EXPORT SYNDICATE. HE FURTHER CONTENDED THAT RECENTLY HON' BLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS M/S RAJINDER PARSHAD JAIN ITA NO. 228 OF 2014 HAS CONFIRMED THE ORDER OF TRIBUNAL IN A CASE WHERE THE ISSUE REGARDING ADDITION ON ACCOUN T OF SECTION 40(A)(IA) OF THE ACT WAS SET ASIDE FOR RE-EXAMINATI ON ON THE BASIS OF DECISION OF SPECIAL BENCH IN MERILYN SHIPP ING & TRANSPORTS VS ACIT (SUPRA). THEREFORE, NOW THE ISS UE IS COVERED BY THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT. 4 7. ON THE OTHER HAND, LD. DR SUBMITTED THAT EVEN IN THE EARLIER YEAR, THE ISSUE WAS DECIDED AGAINST THE ASS ESSEE IN ASSESSMENT YEAR 2006-07. AS FAR AS DECISION OF HON 'BLE PUNJAB & HARYANA HIGH COURT IS CONCERNED, THE TRIBUNAL HAS ORIGINALLY FOLLOWED THE DECISION OF SPECIAL BENCH. LATER ON T HE DECISION OF SPECIAL BENCH WAS STAYED BY THE JURISDICTIONAL HIGH COURT OF ANDHRA PRADESH BECAUSE SPECIAL BENCH WAS CONSTITUTE D IN VISHAKHAPATNAM. THE TRIBUNAL, IN VIEW OF THIS FACT AND ALSO IN VIEW OF THE FACT THAT HON'BLE GUJRAT HIGH COURT TOO K A DIFFERENT VIEW IN DETAILED ORDER, PREFERRED TO FOLLOW THE DEC ISION OF GUJRAT HIGH COURT. IN THIS REGARD, HE REFERRED TO THE DET AILED DISCUSSION OF THE TRIBUNAL IN CASE OF DCIT VS M/S R ANA SUGARS LTD. ITA NO. 48/2011 AND CO NO. 20/2011. 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS CAREFULLY . THIS ISSUE WAS DECIDED IN THE CASE OF THE ASSESSEE FOR ASSESSM ENT YEAR 2006-07 IN ASSESSEE'S APPEAL NO. 1005/CHD/2010 AS U NDER : 31. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FIN D THAT AS FAR AS THE CONTROVERSY WHETHER TDS PROVISIONS ARE APPLI CABLE ON AMOUNT ALREADY PAID OR NOT, WE FIND THAT DECISION O F THE TRIBUNAL IN THE CASE OF MERILYN SHIPPING & TRANSPORTS V ACIT (SUPRA) HAS ALREADY BEEN OVERRULED BY THE HON'BLE CALCUTTA HIGH COURT IN CASE OF CIT VS. CRESCANT EXPORT SYNDICATE AND THERE FORE, PROVISIONS OF TDS ARE APPLICABLE ON AMOUNT ALREADY PAID DURING THE ASSESSMENT YEAR AS WELL AS AMOUNT REMAINING PAY ABLE AT THE END OF THE ASSESSMENT YEAR, THEREFORE, WE CONFIRM THE A DDITION AMOUNTING TO RS. AS FAR AS ISSUE REGARDING HIRE CHA RGE IS CONCERNED, IT SEEMS AGREEMENTS WERE ALSO NOT FILED AND PROPERLY CONSIDERED BY THE ASSESSING OFFICER AS WELL AS LD. CIT(A), THEREFORE, IN THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF ASS ESSING OFFICER WITH A DIRECTION TO REEXAMINE THE ISSUE AND DETERMI NE WHETHER ANY HIRE CHARGES TO THE EXTENT OF RS. 5,27,528/- ARE TH ERE AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 5 9. IN FACT ORIGINALLY, TRIBUNAL STARTED FOLLOWING THE DECISION OF SPECIAL BENCH IN CASE OF MERILYN SHIPPING & TRANSPO RTS VS ACIT (SUPRA) WHEREIN IT WAS HELD THAT IF THE PARTIC ULAR AMOUNT WAS PAID DURING THE YEAR, THEN PROVISIONS OF SECTIO N 40(A)(IA) WERE NOT APPLICABLE. HOWEVER, THIS DECISION WAS CH ALLENGED BY THE REVENUE BEFORE THE HON'BLE ANDHRA PRADESH HIGH COURT AND THE HIGH COURT STAYED THIS ADDITION IN AN INTER IM ORDER PASSED IN ITA 384/2012. LATER ON HON'BLE GUJRAT HI GH COURT DECIDED THIS ISSUE ON THE CONTROVERSY OF PAID AND P AYABLE AGAINST THE ASSESSEE IN CASE OF CIT VS SIKANDARKHAN N. TUNVAR & ORS 87 DTR 137. THE WHOLE CONTROVERSY WAS DISCUS SED BY THE TRIBUNAL IN CO NO. 20/CHD/2011 IN CASE OF M/S R ANA SUGARS LTD. VS DCIT AND THE ISSUE WAS DECIDED VIDE PARAS 28 TO 29 (AT PAGES 8 TO 18 )WHICH ARE AS UNDER : 28 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY. WE FIND THAT HON'BLE GUJARAT HIGH COURT IN CASE OF CIT V. SIKANDARKHAN N. TUNVAR & ORS, SUPRA) HAS HELD THAT PROVISIONS OF SECTION 40A(IA) ARE APPLICABLE WHERE THE AMOUNT HAS BEEN PAID OR REMAIN PAYABLE. IN CONTRAST HON'B LE ALLAHABAD HIGH COURT IN CASE OF CIT V. VECTOR SHIP PING SERVICES (P) LTD (SUPRA), HAS FOLLOWED THE DECISION OF SPECIAL BENCH IN CASE OF MERILIN SHIPPING & TRANSPORT V ADD L CIT, 136 ITD 23 (VISAKHAPATNAM)(SB). BOTH THESE DECISIONS WE RE CONSIDERED BY US IN CASE OF HI TECH FOODS V ITO (SU PRA) AND IT WAS OBSERVED AT PARA 22 TO 27 AS UNDER: 22 WE HAVE HEARD THE RIVAL SUBMISSIONS CAREFULLY AN D FIND THAT THE DECISION OF SPECIAL BENCH HAS BEEN SPECIFICALLY OV ER RULED BY HON'BLE GUJARAT HIGH COURT BY DISCUSSING THE ISSUE IN DETAIL IN CASE OF CIT V. SIKANDARKHAN N TUNWAR AND OTHERS (SUPRA). WE FURTHER FIND THAT IN CASE OF CIT V. VECTOR SHIPPING SERVICE S, THE ISSUE WAS DIFFERENT. IN THAT CASE THE QUESTION POSED BEFORE THE HON'BLE HIGH COURT READS AS UNDER: WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE HON'BLE ITAT HAS RIGHTLY CONFIRMED THE ORDER OF THE LD. CIT(A) AND THEREBY DELETING THE DISALLOWANCE OF RS. 1,17,68,62 1/- MADE BY THE ASSESSING OFFICER U/S 40(A)(IA) OF THE IT ACT BY IG NORING THE FACT THAT THE COMPANY M/S MERCATOR LINES LTD. HAD PERFOR MED SHIP MANAGEMENT WORK ON BEHALF OF THE ASSESSEE M/S VECTO R SHIPPING SERVICES (P) LTD AND THERE WAS A MEMORANDUM OF UNDE RTAKING SIGNED BETWEEN BOTH THE COMPANIES AND A S PER THE D EFINITION OF MEMORANDUM OF UNDERTAKING, IT INCLUDED CONTRACT ALS O. 6 IN THAT CASE SOME EXPENSES WERE DISALLOWED U/S 40(A )(IA) BECAUSE NOT TAX WAS DEDUCTED. ON APPEAL THE TRIBUNAL FOUND THAT THE LD. CIT(A) HAS ALREADY GIVEN A FINDING THAT MERCATOR LI NES LTD. HAD DEDUCTED THE TDS ON SALARY PAID ON BEHALF OF THE AS SESSEE. UNDER SUCH CIRCUMSTANCES THE ASSESSEE WAS NOT REQUIRED TO DEDUCT THE TDS ON REIMBURSEMENT ON SALARY BEING MADE BY IT TO M/S MERCATOR LINES LTD. 23 HON'BLE HIGH COURT HAS CONFIRMED THE DECISION OF THE TRIBUNAL. THUS IT IS CLEAR THAT HON'BLE ALLAHABAD HIGH COURT WAS NEITHER REQUIRED NOR HAS GIVEN DETAIL REASONS FOR APPROVIN G THE DECISION OF SPECIAL BENCH WHEREAS HON'BLE GUJARAT HIGH COURT HA S AFTER DETAILED DISCUSSION, OVER RULED THE DECISION OF SPE CIAL BENCH. 24 IN CASE OF SIKANDARKHAN N TUNWAR (SUPRA) THE ASS ESSEE WAS ENGAGED IN THE BUSINESS OF TRANSPORT CONTRACTOR AND COMMISSION AGENT. DURING THE SCRUTINY ASSESSMENT IT WAS NOTI CED BY THE ASSESSING OFFICER THAT EXPENDITURE IN THE NATURE OF PAYMENT MADE BY THE ASSESSEE TO ITS SUB-CONTRACTORS TO THE TUNE OF RS. 8.74 CRORES. SINCE THE ASSESSEE HAD ADMITTEDLY NOT DEDU CTED THE TAX FROM SUCH PAYMENTS AND INDIVIDUAL PAYMENTS TO TRANS PORTERS EXCEEDED LIMIT OF RS. 20,000/- FOR A SINGLE TRIP AN D AGGREGATED OVER RS. 50,000/- IN THE YEAR THOUGH THE ASSESSEE HAD OB TAINED FORM NO. 15-I FROM SUCH SUB-CONTRACTORS BUT THE SAME WERE NO T FURNISHED ALONG WITH THE PARTICULARS IN FORM 15-J TO THE CIT BEFORE DUE DATE AND THEREFORE, THE EXPENDITURE ON ACCOUNT OF PAYM ENT TO SUB- CONTRACTORS WAS DISALLOWED BY INVOKING THE PROVISIO NS OF SECTION 40(A)(IA) OF THE ACT. 25. ON APPEAL THE LD. CIT(A) CONFIRMED THIS ORDER. 26 WHEN THE MATTER TRAVELED TO THE TRIBUNAL THE APP EAL OF THE ASSESSEE WAS ALLOWED BY RELYING ON THE DECISION OF MERILYN SHIPPING TRANSPORTERS V. ACIT (SUPRA). THE TRIBUNA L HELD THAT THE WORD PAYABLE USED IN SECTION 40(A)()IA) WOULD MAK E PROVISION APPLICABLE ONLY IN RESPECT OF EXPENDITURE PAYABLE ON 31 ST MARCH OF A PARTICULAR YEAR AND SUCH PROVISION CANNOT BE INVO KED TO DISALLOW THE AMOUNTS WHICH HAS ALREADY BEEN PAID DURING THE YEAR THOUGH THE TAX MAY NOT HAVE BEEN DEDUCTED AT SOURCE. FOLLOWIN G SPECIFIC QUESTION WAS POSED BEFORE THE HON'BLE HIGH COURT: IN ALL THESE APPEALS THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE SPECIAL BENCH IN THE CASE OF M/S MERILYN SHIPPING T RANSPORTERS V. ACIT (SUPRA) AND DELETED THE DISALLOWANCE ON THIS L IMITED GROUND. AS IN THE PRESENT CASE, OTHER MERILYN SHIPPING TRAN SPORTERS V. ACIT (SUPRA) GROUNDS OF CONTROVERSY BETWEEN THE PARTIES WITH RESPECT TO ALLOWABILITY OR OTHERWISE OF SUCH EXPENDITURE WAS N OT EXAMINED BY THE TRIBUNAL. FOR THE PURPOSE OF THESE APPEALS, TH EREFORE, WE FRAME FOLLOWING SUBSTANTIAL QUESTION OF LAW: 1 WHETHER DISALLOWANCE U/S 40(A)(IA) OF THE I.T AC T COULD BE MADE ONLY IN RESPECT OF SUCH AMOUNTS WHICH ARE PAYABLE AS ON 31 ST MACH OF THE YEAR UNDER CONSIDERATION? 2 WHETHER DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S MERILYN SHIPPING TRANSPORTERS V. ACIT (SUPRA) L AYS DOWN CORRECT LAW? 27 HON'BLE GUJARAT HIGH COURT AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES REFERRED TO THE PROVISION OF CHAPT ER XVII A OF THE ACT DEALING WITH THE TAX DEDUCTION PROVISIONS. AFT ER THIS REFERENCE WAS MADE TO SECTION 40(A)(IA) THROUGH WHICH IT WAS PROVIDED THAT TAX HAS NOT BEEN DEDUCTED ON CERTAIN PAYMENTS AND T HE SAME WILL NOT BE ALLOWABLE. THE HON'BLE HIGH COURT DISCUSSED THE IMPLEMENTATIONS OF THIS PROVISION AND DECISION OF S PECIAL BENCH IN CASE OF MERILYN SHIPPING TRANSPORTERS V. ACIT (SUPR A) AND OBSERVED AND HELD AS UNDER: 7 17. IN PLAIN TERMS SECTION 40(A)(IA) PROVIDES THAT IN CASE OF ANY INTEREST, COMMISSION OR BROKERAGE, RENT, ROYALTY, FEES FOR PROFESSIONAL SER VICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO A RESIDENT, OR AMOUNTS PAYABLE TO A CONT RACTOR OR SUB-CONTRACTOR FOR CARRYING OUT ANY WORK ON WHICH TAX IS DEDUCTIBLE AT SOURCE AND S UCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTION HAS NOT BEEN PAID BEFORE THE DUE DATE, SU CH AMOUNTS SHALL NOT BE DEDUCTED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROF ITS AND GAINS OF BUSINESS OR PROFESSION IRRESPECTIVE OF THE PROVISIONS CONTAINED IN SECTIONS 30 TO 38 OF THE ACT. PROVISO TO SECTION 40(A)(IA), HOWEVER, ENABLES THE ASSESSEE TO TAKE SUCH DEDUCTION IN SUBSEQUENT YEAR, IF TAX IS DEDUCTED IN SUCH YEAR OR THOUGH DEDUCTED DURING THE PREVIOUS YEAR BUT PAID AFTER THE DUE DATE SPECIFIED IN SUB-S ECTION(1) OF SECTION 139 OF THE ACT. 18. IN SUCH CONTEXT, THEREFORE, THE QUESTION ARISES WHETHER UNDER SECTION 40(A)(IA) OF THE ACT DISALLOWANCE OF THE EXPENDITURE PAYMENT OF WHIC H, THOUGH REQUIRED DEDUCTION OF TAX AT SOURCE HAS NOT BEEN MADE WOULD BE CONFINED ONLY TO THOSE CASES WHERE THE AMOUNT REMAINS PAYABLE TILL THE END OF THE PREVIOUS YEAR O R WOULD INCLUDE ALL AMOUNTS WHICH BECAME PAYABLE DURING THE ENTIRE PREVIOUS YEAR. 19. DECISION IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (SUPRA) WAS RENDERED BY THE SPECIAL BENCH BY A SPLIT OPINION. L EARNED ACCOUNTANT MEMBER WHO WAS IN MINORITY, PLACED HEAVY RELIANCE ON A DECISION OF MA DRAS HIGH COURT IN THE CASE OF TUBE INVESTMENTS OF INDIA LTD. AND ANOTHER VS. ASSISTANT COMMISSIONER OF INCOME-TAX (TDS) AND OTHERS REPORTED IN [2010] 325 ITR 610 (MAD) . LEARNED JUDGE DID NOTICE THAT THE HIGH COURT IN SUCH CASE WAS CONCERNED WITH THE VIRES OF THE STATUTORY PROVISION BUT FOUND SOME OF THE OBSERVATIONS MADE BY THE COURT IN THE PROCESS USEFUL AND APPLICABLE. LEARNED JUDGE REJECTED THE THEORY OF NARROW INTERPR ETATION OF TERM PAYABLE AND OBSERVED AS UNDER: 12.4 IN OUR CONSIDERED OPINION, THERE IS NO AMBIGUI TY IN THE SECTION AND TERM PAYABLE CANNOT BE ASCRIBED NARROW INTERPRETATION AS CONTENDED BY ASSESSEE. HAD THE INTENTIONS OF THE LEGISLATURE WER E TO DISALLOW ONLY ITEMS OUTSTANDING AS ON 31 ST MARCH, THEN THE TERM PAYABLE WOULD HAVE BEEN QUALIFIED BY THE PHRASE AS OUTSTANDING ON 31 ST MARCH. HOWEVER, NO SUCH QUALIFICATION IS THERE IN THE SECTION AND, THEREFOR E, THE SAME CANNOT BE READ INTO THE SECTION AS CONTENDED BY THE ASSESSEE. 20. ON THE OTHER HAND, LEARNED JUDICIAL MEMBER SPEA KING FOR MAJORITY ADOPTED A STRICTER INTERPRETATION. HEAVY RELIANCE WAS PLACED ON THE FI NANCE BILL OF 2004, WHICH INCLUDED THE DRAFT OF THE AMENDMENT IN SECTION 40 AND THE ULTIMA TE AMENDMENT WHICH ACTUALLY WAS PASSED BY THE PARLIAMENT. IT WAS OBSERVED THAT FROM THE COMPARISON BETWEEN THE PROPOSED AND THE ENACTED PROVISION IT CAN BE SEEN T HAT THE LEGISLATURE HAS REPLACED THE WORDS AMOUNTS CREDITED OR PAID WITH THE WORD PAYABL E IN THE ENACTMENT. ON SUCH BASIS, IT WAS HELD THAT THIS IS A CASE OF CONSCIOUS OMISSION AND WHEN THE LANGUAGE WAS CLEAR THE INTENTION OF THE LEGISLATURE HAD TO BE GA THERED FROM LANGUAGE USED. IN THEIR OPINION THE PROVISION WOULD APPLY ONLY TO AMOUNTS W HICH ARE PAYABLE AT THE END OF THE YEAR. HAVING SAID SO, CURIOUSLY, IT WAS OBSERVED TH AT THE PROVISO TO SECTION 40(A)(IA) OF THE ACT LAYS DOWN THAT EARLIER YEAR S PROVISION CAN BE A LLOWED IN SUBSEQUENT YEARS ONLY IF TDS IS DEDUCTED AND DEPOSITED AND, THEREFORE, REVENUE S FEAR IS UNFOUNDED AS THE PROVISION OF SECTION 40(A)(IA) OF THE ACT COVERS THE SITUATIO N. 21. IN THE PRESENT CASE, WE HAVE NO HESITATION IN A CCEPTING THE CONTENTION THAT THE PROVISION MUST BE CONSTRUED STRICTLY. THIS BEING A PROVISION WHICH CREATES AN ARTIFICIAL CHARGE ON AN AMOUNT WHICH IS OTHERWISE NOT AN INCOM E OF THE ASSESSEE, CANNOT BE LIBERALLY CONSTRUED. UNDOUBTEDLY IF THE LANGUAGE OF THE SECTI ON IS PLAIN, IT MUST BE GIVEN ITS TRUE MEANING IRRESPECTIVE OF THE CONSEQUENCES. WE HAVE N OTICED THAT THE PROVISION MAKES DISALLOWANCE OF AN EXPENDITURE WHICH HAS OTHERWISE BEEN INCURRED AND IS ELIGIBLE FOR DEDUCTION, ON THE GROUND THAT THOUGH TAX WAS REQUIR ED TO BE DEDUCTED AT SOURCE IT WAS NOT DEDUCTED OR IF DEDUCTED, HAD NOT BEEN DEPOSITED BEF ORE THE DUE DATE. BY ANY INTENDMENT OR LIBERAL CONSTRUCTION OF SUCH PROVISION, THE LIAB ILITY CANNOT BE FASTENED IF THE PLAIN MEANING OF THE SECTION DOES NOT SO PERMIT. 22. FOR THE PURPOSE OF THE SAID SECTION, WE ARE ALS O OF THE OPINION THAT THE TERMS PAYABLE AND PAID ARE NOT SYNONYMOUS. WORD P AID HAS BEEN DEFINED IN SECTION 43(2) OF THE ACT TO MEAN ACTUALLY PAID OR INCURRED ACCORDING TO THE METHOD OF ACCOUNTING, UPON THE BASIS OF WHICH PROFITS AND GAINS ARE COMPU TED UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION . SUCH DEFINITION IS APPLI CABLE FOR THE PURPOSE OF SECTIONS 28 TO 41 UNLESS THE CONTEXT OTHERWISE REQUIRES. IN CONTRA ST, TERM PAYABLE HAS NOT BEEN DEFINED. THE WORD PAYABLE HAS BEEN DESCRIBED IN WEB STER S THIRD NEW INTERNATIONAL 8 UNABRIDGED DICTIONARY AS REQUIRING TO BE PAID: CAPA BLE OF BEING PAID: SPECIFYING PAYMENT TO A PARTICULAR PAYEE AT A SPECIFIED TIME OR OCCASI ON OR ANY SPECIFIED MANNER. IN THE CONTEXT OF SECTION 40(A)(IA), THE WORD PAYABLE WOULD NOT IN CLUDE PAID . IN OTHER WORDS, THEREFORE, AN AMOUNT WHICH IS ALREADY PAID OVER CEA SES TO BE PAYABLE AND CONVERSELY WHAT IS PAYABLE CANNOT BE ONE THAT IS ALREADY PAID. WHEN AS RIGHTLY POINTED OUT BY COUNSEL MR. HEMANI, THE ACT USES TERMS PAID AND PAYABLE AT DIFF ERENT PLACES IN DIFFERENT CONTEXT DIFFERENTLY, FOR TH E PURPOSE OF SECTION 40(A)(IA) OF THE ACT, TERM PAY ABLE CANNOT BE SEEN TO BE INCLUDING THE EXPRESSION PAID . THE TERM PAID AND PAYABLE IN THE CONTEXT OF SECTION 40(A)(IA) ARE NOT USED INTERCHANGABLY. IN T HE CASE OF BIRLA CEMENT WORKS AND ANOTHER VS. STATE OF RAJASTHAN AND ANOTHER REPORTED IN AIR 1994(SC) 2393 , THE APEX COURT OBSERVED THAT THE WORD PAYABLE IS A DESCRIPTI VE WORD, WHICH ORDINARILY MEANS THAT WHICH MUST BE PAID OR IS DUE OR MAY BE PAID BUT ITS CORRECT MEANING CAN ONLY BE DETERMINED IF THE CONTEXT IN WHICH IT IS USED IS KE PT IN VIEW. THE WORD HAS BEEN FREQUENTLY UNDERSTOOD TO MEAN THAT WHICH MAY, CAN OR SHOULD BE PAID AND IS HELD EQUIVALENT TO DUE . 23. DESPITE THIS NARROW INTERPRETATION OF SECTION 4 0(A)(IA), THE QUESTION STILL SURVIVES IF THE TRIBUNAL IN CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (SUPRA) WAS ACCURATE IN ITS OPINION. IN THIS CONTEXT, WE WOULD LIKE TO EXAM INE TWO ASPECTS. FIRSTLY, WHAT WOULD BE THE CORRECT INTERPRETATION OF THE SAID PROVISION. SECON DLY, WHETHER OUR SUCH UNDERSTANDING OF THE LANGUAGE USED BY THE LEGISLATURE SHOULD WAVER O N THE PREMISE THAT AS PROPOUNDED BY THE TRIBUNAL, THIS WAS A CASE OF CONSCIOUS OMISSION ON PART OF THE PARLIAMENT. BOTH THESE ASPECTS WE WOULD ADDRESS ONE AFTER ANOTHER. IF ONE LOOKS CLOSELY TO THE PROVISION, IN QUESTION, ADVERSE CONSEQUENCES OF NOT BEING ABLE TO CLAIM DEDUCTION ON CERTAIN PAYMENTS IRRESPECTIVE OF THE PROVISIONS CONTAINED IN SECTION S 30 TO 38 OF THE ACT WOULD FLOW IF THE FOLLOWING REQUIREMENTS ARE SATISFIED:- (A) THERE IS INTEREST, COMMISSION OR BROKERAGE, REN T, ROYALTY, FEES FOR PROFESSIONAL SERVICES OR FEES FOR TECHNICAL SERVICES PAYABLE TO RESIDENT OR AMOUNTS PAYABLE TO A CONTRACTOR OR SUB-CONTRACTOR BEING RESIDENT FOR CARRYING OUT ANY WORK. (B) THESE AMOUNTS ARE SUCH ON WHICH TAX IS DEDUCTIB LE AT SOURCE UNDER CHAPTER XVII-B. (C)SUCH TAX HAS NOT BEEN DEDUCTED OR AFTER DEDUCTIO N HAS NOT BEEN PAID ON OR BEFORE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 39. FOR THE PURPOSE OF CURRENT DISCUSSION REFERENCE TO THE PROVISO IS NOT NECESSARY. 24. WHAT THIS SUB-SECTION, THEREFORE, REQUIRES IS T HAT THERE SHOULD BE AN `AMOUNT PAYABLE IN THE NATURE DESCRIBED ABOVE, WHICH IS SUCH ON WHI CH TAX IS DEDUCTIBLE AT SOURCE UNDER CHAPTER XVII-B BUT SUCH TAX HAS NOT BEEN DEDUCTED O R IF DEDUCTED NOT PAID BEFORE THE DUE DATE. THIS PROVISION NO-WHERE REQUIRES THAT THE AMO UNT WHICH IS PAYABLE MUST REMAIN SO PAYABLE THROUGHOUT DURING THE YEAR. TO REITERATE TH E PROVISION HAS CERTAIN STRICT AND STRINGENT REQUIREMENTS BEFORE THE UNPLEASANT CONSEQ UENCES ENVISAGED THEREIN CAN BE APPLIED. WE ARE PREPARED TO AND WE ARE DUTY BOUND T O INTERPRET SUCH REQUIREMENTS STRICTLY. SUCH REQUIREMENTS, HOWEVER, CANNOT BE ENLARGED BY A NY ADDITION OR SUBTRACTION OF WORDS NOT USED BY THE LEGISLATURE. THE TERM USED IS INTER EST, COMMISSION, BROKERAGE ETC. IS PAYABLE TO A RESIDENT OR AMOUNTS PAYABLE TO A CONTRACTOR O R SUB-CONTRACTOR FOR CARRYING OUT ANY WORK. THE LANGUAGE USED IS NOT THAT SUCH AMOUNT MUST CONTINUE TO REMAIN PAYABLE TILL THE END OF THE ACCOUNTING YEAR. ANY SUCH INTERPRETA TION WOULD REQUIRE READING WORDS WHICH THE LEGISLATURE HAS NOT USED. NO SUCH INTERPRETATIO N WOULD EVEN OTHERWISE BE JUSTIFIED BECAUSE IN OUR OPINION, THE LEGISLATURE COULD NOT H AVE INTENDED TO BRING ABOUT ANY SUCH DISTINCTION NOR THE LANGUAGE USED IN THE SECTION BR INGS ABOUT ANY SUCH MEANING. IF THE INTERPRETATION AS ADVANCED BY THE ASSESSEES IS ACCE PTED, IT WOULD LEAD TO A SITUATION WHERE THE ASSESSEE WHO THOUGH WAS REQUIRED TO DEDUCT THE TAX AT SOURCE BUT NO SUCH DEDUCTION WAS MADE OR MORE FLAGRANTLY DEDUCTION THOUGH MADE I S NOT PAID TO THE GOVERNMENT, WOULD ESCAPE THE CONSEQUENCE ONLY BECAUSE THE AMOUNT WAS ALREADY PAID OVER BEFORE THE END OF THE YEAR IN CONTRAST TO ANOTHER ASSESSEE WHO WOU LD OTHERWISE BE IN SIMILAR SITUATION BUT IN WHOSE CASE THE AMOUNT REMAINED PAYABLE TILL THE END OF THE YEAR. WE SIMPLY DO NOT SEE ANY LOGIC WHY THE LEGISLATURE WOULD HAVE DESIRED TO BRING ABOUT SUCH IRRECONCILABLE AND DIVERSE CONSEQUENCES. WE HASTEN TO ADD THAT THIS IS NOT THE PRIME BASIS ON WHICH WE HAVE ADOPTED THE INTERPRETATION WHICH WE HAVE GIVEN. IF THE LANGUAGE USED BY THE PARLIAMENT CONVEYED SUCH A MEANING, WE WOULD NOT HAVE HESITATE D IN ADOPTING SUCH AN INTERPRETATION. WE ONLY HIGHLIGHT THAT WE WOULD NOT READILY ACCEPT THAT THE LEGISLATURE DESIRED TO BRING ABOUT AN INCONGRUOUS AND SEEMINGLY IRRECONCILABLE C ONSEQUENCES. THE DECISION OF THE SUPREME COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX, GUJARAT VS. ASHOKBHAI CHIMANBHAI (SUPRA), WOULD NOT ALTER THIS SITUATION. THE SAID D ECISION, OF COURSE, 9 RECOGNIZES THE CONCEPT OF ASCERTAINING THE PROFIT A ND LOSS FROM THE BUSINESS OR PROFESSION WITH REFERENCE TO A CERTAIN PERIOD I.E. THE ACCOUNT ING YEAR. IN THIS CONTEXT, LAST DATE OF SUCH ACCOUNTING PERIOD WOULD ASSUME CONSIDERABLE SIGNIFI CANCE. HOWEVER, THIS DECISION NOWHERE INDICATES THAT THE EVENTS WHICH TAKE PLACE DURING THE ACCOUNTING PERIOD SHOULD BE IGNORED AND THE ASCERTAINMENT OF FULFILLING A CERTA IN CONDITION PROVIDED UNDER THE STATUTE MUST BE JUDGED WITH REFERENCE TO LAST DATE OF THE A CCOUNTING PERIOD. PARTICULARLY, IN THE CONTEXT OF REQUIREMENTS OF SECTION 40(A)(IA) OF THE ACT, WE SEE NO WARRANT IN THE SAID DECISION OF THE SUPREME COURT TO APPLY THE TEST OF PAYABILITY ONLY AS ON 31 ST MARCH OF THE YEAR UNDER CONSIDERATION. MERELY BECAUSE, ACCOUNTS ARE CLOSED ON THAT DATE AND THE COMPUTATION OF PROFIT AND LOSS IS TO BE JUDGED WITH REFERENCE TO SUCH DATE, DOES NOT MEAN THAT WHETHER AN AMOUNT IS PAYABLE OR NOT MUST BE AS CERTAINED ON THE STRENGTH OF THE POSITION EMERGING ON 31 ST MARCH. 25. THIS BRINGS US TO THE SECOND ASPECT OF THIS DIS CUSSION, NAMELY, WHETHER THIS IS A CASE OF CONSCIOUS OMISSION AND THEREFORE, THE LEGISLATUR E MUST BE SEEN TO HAVE DELIBERATELY BROUGHT ABOUT A CERTAIN SITUATION WHICH DOES NOT RE QUIRE ANY FURTHER INTERPRETATION. THIS IS THE FUNDAMENTAL ARGUMENT OF THE TRIBUNAL IN THE CAS E OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT(SUPRA) TO ADOPT A PARTICULAR VIEW. 26. WHILE INTERPRETING A STATUTORY PROVISION THE CO URTS HAVE OFTEN APPLIED HYDEN S RULE OR THE MISCHIEF RULE AND ASCERTAINED WHAT WAS THE POSI TION BEFORE THE AMENDMENT, WHAT THE AMENDMENT SOUGHT TO REMEDY AND WHAT WAS THE EFFECT OF THE CHANGES. 27. IN THE CASE OF BENGAL IMMUNITY CO. LTD. VS. STATE OF BIHAR AND OTH ERS REPORTED IN AIR 1955 SC 661 , THE APEX COURT REFERRED TO THE FAMOUS ENGLISH DECISION IN HYDEN S CASE WHEREIN WHILE ADOPTING RESTRICTIVE OR ENLARGIN G INTERPRETATION, IT WAS OBSERVED THAT FOUR THINGS ARE TO BE CONSIDERED, (1) WHAT WAS THE COMMO N LAW BEFORE MAKING OF THE ACT (2) WHAT WAS THE MISCHIEF AND DEFECT IN WHICH THE COMMO N LAW DID NOT PROVIDE. (3) WHAT REMEDY THE PARLIAMENT HAD RESOLVED AND ADOPTED TO C URE THE DISEASE AND (4) TRUE REASON OF THE REMEDY. 28. IN SUCH CONTEXT, THE POSITION PREVAILING PRIOR TO THE AMENDMENT INTRODUCED IN SECTION 40(A) WOULD CERTAINLY BE A RELEVANT FACTOR. HOWEVER , THE PROCEEDINGS IN THE PARLIAMENT, ITS DEBATES AND EVEN THE SPEECHES MADE BY THE PROPOSER OF A BILL ARE ORDINARILY NOT CONSIDERED AS RELEVANT OR SAFE TOOLS FOR INTERPRETA TION OF A STATUTE. IN THE CASE OF ASWINI KUMAR GHOSE AND ANOTHER VS. ARABINDA BOSE AND ANOTH ER REPORTED IN A.I.R. 1952 SC 369 IN A CONSTITUTION BENCH DECISION OF (CORAM: PATANJALI SASTRI, C.J.) , OBSERVED THAT:- 33. &..IT WAS URGED THAT ACCEPTANCE OR REJECTION OF AMENDMENTS TO A BILL IN THE COURSE OF PARLIAMENTARY PROCEEDINGS FOR MS PART OF THE PRE- ENACTMENT HISTORY OF A STATUTE AND AS SUCH MIGHT TH ROW VALUABLE LIGHT ON THE INTENTION OF THE LEGISLATURE WHEN THE LANGUA GE USED IN THE STATUE ADMITTED OF MORE THAN ONE CONSTRUCTION. WE A RE UNABLE TO ASSENT TO THIS PREPOSITION. THE REASON WHY A PARTICULAR AMENDMENT WAS PROPOSED OR ACCEPTED OR REJECTED IS OFTEN A MATTER OF CONTROVER SY, AS IT HAPPENED TO BE IN THIS CASE, AND WITHOUT THE SPEECH ES BEARING UPON THE MOTION, IT CANNOT BE ASCERTAINED WITH ANY REASONABLE DEGREE OF CERTAINTY. AND WHERE THE LEGISLATURE HAPP ENS TO BE BICAMERAL, THE SECOND CHAMBER MAY OR MAY NOT HAVE K NOWN OF SUCH REASON WHEN IT DEALT WITH THE MEASURE. WE HOLD ACCORDINGLY THAT ALL THE THREE FORMS OF EXTRINSIC AID SOUGHT TO BE RESORTED TO BY THE PARTIES IN THE CASE MUS BE EXCLUDED FROM CONSID ERATION IN ASCERTAINING THE TRUE OBJECT AND INTENTION OF THE L EGISLATURE. 29. IN YET ANOTHER CONSTITUTION BENCH JUDGMENT IN T HE CASE OF A.K.GOPALAN VS. STATE OF MADRAS REPORTED IN AIR 1950 SC 27 , IT WAS OBSERVED AS UNDER:- 17.....THE RESULT APPEARS TO BE THAT WHILE IT IS N OT PROPER TO TAKE INTO CONSIDERATION THE INDIVIDUAL OPINIONS OF MEMBERS OF PARLIAMENT OR CON VENTION TO CONSTRUE THE MEANING OF THE PARTICULAR CLAUSE, WHEN A QUESTION IS RAISED WH ETHER A CERTAIN PHRASE OR EXPRESSION WAS UP FOR CONSIDERATION AT ALL OR NOT, A REFERENCE TO THE DEBATES MAY BE PERMITTED. 30. IN THE CASE OF EXPRESS NEWSPAPER (PRIVATE) LTD. AND ANOTHER VS. THE UNION OF INDIA AND OTHERS REPORTED IN AIR 1958 SC 578 , N.H.BHAGWATI, J., OBSERVED AS UNDER:- 10 173. WE DO NOT PROPOSE TO ENTER INTO ANY ELABORATE DISCUSSION ON THE QUESTION WHETHER IT WOULD BE COMPETENT TO US IN ARRIVING AT A PROPER CONSTRUCTION OF THE EXPRESSION FIXING RATES OF WAGES TO LOOK INTO THE S TATEMENT OF OBJECTS AND REASONS ATTACHED TO THE BILL NO.13 OF 1955 AS INTRODUCED IN THE RAJYA SABHA OR THE CIRCUMSTANCES UNDER WHICH THE WORD MINIMUM CAME TO BE DELETED FROM THE PROVISIONS OF THE BILL RELATING TO RATES OF WAGES A ND THE WAGE BOARD AND THE FACT OF SUCH DELETION WHEN THE ACT CAME TO BE PASSED IN ITS PRESENT FORM. THERE IS A CONSENSUS OF OPINION THAT THESE ARE NOT AIDS TO THE CONSTRUCTION OF THE TERMS OF THE STATUTE WHICH HAVE OF COURSE TO BE GIVEN THEIR PLAI N AND GRAMMATICAL MEANING ( SEE: ASHVINI KUMAR GHOSH V. ARABINDA BOSE, 1953 SC R 1:( AIR 1952 SC 369) (Z24) AND PROVAT KUMAR KAR V. WILLIAM TREVELYAN CURTIEZ PARKE R, AIR 1950 CAL 116 (Z25). IT IS ONLY WHEN THE TERMS OF THE STATUTE ARE AMBIGUOUS OR VAGUE THAT RESORT MAY BE HAD TO THEM FOR THE PURPOSE OF ARRI VING AT THE TRUE INTENTION OF THE LEGISLATURE. 31. IT CAN THUS BE SEEN THAT THE DEBATES IN THE PARLIAMENT ARE ORDINARILY NOT CONSIDERED AS THE AIDS FOR INTERPRETATION OF THE ULTIMATE PROVISI ON WHICH MAY BE BROUGHT INTO THE STATUTE. THE DEBATES AT BEST INDICATE THE OPINION OF THE IND IVIDUAL MEMBERS AND ARE ORDINARILY NOT RELIED UPON FOR INTERPRETING THE PROVISIONS, PARTIC ULARLY WHEN THE PROVISIONS ARE PLAIN. WE ARE CONSCIOUS THAT DEPARTURE IS MADE IN TWO EXCEPTI ONAL CASES, NAMELY, THE DEBATES IN THE CONSTIT UENT ASSEMBLY AND IN CASE OF FINANCE MINISTER S SPEE CH EXPLAINING THE REASON FOR INTRODUCTION OF A CERTAIN PROVISION. THE REASON WHY A CERTAIN LANGUAGE WAS USED IN A DRAFT BILL AND WHY THE PROVISION ULTIMATELY ENACTED CARRI ED A DIFFERENT EXPRESSION CANNOT BE GATHERED FROM MERE COMPARISON OF THE TWO SETS OF PR OVISIONS. THERE MAY BE VARIETY OF REASONS WHY THE ULTIMATE PROVISION MAY VARY FROM TH E ORIGINAL DRAFT. IN THE PARLIAMENTARY SYSTEM, TWO HOUSES SEPARATELY DEBATE THE LEGISLATIO NS UNDER CONSIDERATION. IT WOULD ALL THE MORE BE UNSAFE TO REFER TO OR RELY UPON THE DRAFTS, AMENDMENTS, DEBATES ETC FOR INTERPRETATION OF A STATUTORY PROVISION WHEN THE LA NGUAGE USED IS NOT CAPABLE OF SEVERAL MEANINGS. IN THE PRESENT CASE THE TRIBUNAL IN CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (SUPRA) FELL IN A SERIOUS ERROR IN MERELY COMPARING THE LANGUAGE USED IN THE DRAFT BILL AND FINAL ENACTMENT TO ASSIGN A P ARTICULAR MEANING TO THE STATUTORY PROVISION. 32. IT IS, OF COURSE, TRUE THAT THE COURTS IN INDIA HAVE BEEN APPLYING THE PRINCIPLE OF DELIBERATE OR CONSCIOUS OMISSION. SUCH PRINCIPLE IS APPLIED MAINLY WHEN AN EXISTING PROVISION IS AMENDED AND A CHANGE IS BROUGHT ABOUT. WHILE INTERPRETING SUCH AN AMENDED PROVISION, THE COURTS WOULD IMMEDIATELY INQUIRE WHA T WAS THE STATUTORY PROVISION BEFORE AND WHAT CHANGES THE LEGISLATURE BROUGHT ABOUT AND COMPARE THE EFFECT OF THE TWO. THE OTHER OCCASION FOR APPLYING THE PRINCIPLE, WE NOTIC E FROM VARIOUS DECISIONS OF THE SUPREME COURT, HAS BEEN WHEN THE LANGUAGE OF THE LEGISLATUR E IS COMPARED WITH SOME OTHER ANALOGOUS STATUTE OR OTHER PROVISIONS OF THE SAME S TATUTE OR WITH EXPRESSION WHICH COULD APPARENTLY OR OBVIOUSLY BEEN USED IF THE LEGISLATUR E HAD DIFFERENT INTENTION IN MIND, WHILE FRAMING THE PROVISION. WE MAY REFER TO SOME OF SUCH DECISIONS PRESENTLY. IN THE CASE OF BHUWALKA STEEL INDUSTRIES LTD. VS. BOMBAY IRON AND STEEL LABOUR BOARD REPORTED IN AIR 2010 (SUPPL.) 122 , THE APEX COURT OBSERVED AS UNDER:- THE OMISSION OF THE WORDS AS PROPOSED EARLIER FROM THE FINAL DEFINITION IS A DELIBERATE AND CONSCIOUS ACT ON THE PART OF THE LEG ISLATURE, ONLY WITH THE OBJECTIVE TO PROVIDE PROTECTION TO ALL THE LABOURER S OR WORKERS, WHO WERE THE MANUAL WORKERS AND WERE ENGAGED OR TO BE ENGAGED IN ANY SCHEDULED EMPLOYMENT. THEREFORE, THERE WAS A SPECIFIC ACT ON THE PART OF THE LEGISLATURE TO ENLARGE THE SCOPE OF THE DEFINITION AND ONCE WE ACCEPT THIS, ALL THE ARGUMENTS REGARDING THE OBJECTS AND REASONS, THE CO MMITTEE REPORTS, THE LEGISLATIVE HISTORY BEING CONTRARY TO THE EXPRESS L ANGUAGE, ARE RELEGATED TO THE BACKGROUND AND ARE LIABLE TO BE IGNORED. 33. IN THE CASE OF AGRICULTURAL PRODUCE MARKET COMMITTEE, NARELA, DELH I VS. COMMISSIONER OF INCOME TAX AND ANR. REPORTED IN AIR 2008 SC(SUPPLEMENT) 566 , THE SUPREME COURT NOTICED THAT PRIOR TO FINANCE ACT, 20 02, THE INCOME TAX ACT DID NOT CONTAIN THE DEFINITION OF WORDS LOCAL AUTHORITY . THE WORD C AME TO BE DEFINED FOR THE FIRST TIME BY THE FINANCE ACT OF 2002 BY EXPLANATION/ DEFINITION CLAUSE TO SECTION 10(20) OF THE ACT. IT WAS FURTHER NOTICED THA T THERE WERE SIGNIFICANT DIFFERENCE IN THE DEFINITI ON OF TERM LOCAL AUTHORITY CONTAINED UNDER SECTION 3(31) OF THE GENE RAL CLAUSES ACT, 1987 AS COMPARED TO THE DEFINITION CLAUSE INSERTED IN SECTION 10(20) OF THE INCOME TAX ACT, 1961 VIDE FINANCE ACT, OF 2002. IN THIS CONTEXT IT WAS OBSERV ED THAT:- 27. CERTAIN GLARING FEATURES CAN BE DECIPHERED FROM THE ABOVE COMPARATIVE CHART. UNDER SECTION 3(31) OF THE GENER AL CLAUSES ACT, 1897, LOCAL AUTHORITY WAS DEFINED TO MEAN A MUNICI PAL 11 COMMITTEE, DISTRICT BOARD, BODY OF PORT COMMISSIONE RS OR OTHER AUTHORITY LEGALLY ENTITLED TO THE CONTROL OR MANAGE MENT OF A MUNICIPAL OR LOCAL FUND. THE WORDS OTHER AUTHORITY IN SECTIO N 3(31) OF THE 1897 ACT HAS BEEN OMITTED BY PARLIAMENT IN THE EXPL ANATION/ DEFINITION CLAUSE INSERTED IN SECTION 10(20) OF THE 1961 ACT V IDE FINANCE ACT, 2002. THEREFORE, IN OUR VIEW, IT WOULD NOT BE CORRE CT TO SAY THAT THE ENTIRE DEFINITION OF THE WORD LOCAL AUTHORITY IS BO DILY LIFTED FROM SECTION 3(31) OF THE 1897 ACT AND INCORPORATED, BY PARLIAMENT, IN THE SAID EXPLANATION TO SECTION 10(20) OF THE 1961 ACT. THIS DELIBERATE OMISSION IS IMPORTANT. 34. THE APEX COURT IN THE CASE OF GREATER BOMBAY CO-OPERATIVE BANK LTD. VS. M/S. UNITED YARN TEX.PVT.LTD & ORS. REPORTED IN AIR 2007 SC 1584 , IN THE CONTEXT OF QUESTION WHETHER THE COOPERATIVE BANKS TRANSACTING BUSINESS OF BANKING FALL WITHIN THE MEANING OF BANKING COMPANY DEFINED IN THE BANKING REGULATION A CT, 1949, OBSERVED AS UNDER:- 59. THE RDB ACT WAS PASSED IN 1993 WHEN PARLIAMENT HAD BEFORE IT THE PROVISIONS OF THE BR ACT AS AMENDED BY ACT NO.23 OF 1965 BY ADDITION OF SOME MORE CLAUSES IN SECTION 56 OF THE ACT. THE PAR LIAMENT WAS FULLY AWARE THAT THE PROVISIONS OF THE BR ACT APPLY TO CO-OPERA TIVE SOCIETIES AS THEY APPLY TO BANKING COMPANIES. THE PARLIAMENT WAS ALSO AWARE THAT THE DEFINITION OF BANKING COMPANY IN SECTION 5(C) HAD NOT BEEN ALTERE D BY ACT NO.23 OF 1965 AND IT WAS KEPT INTACT, AND IN FACT ADDITIONAL DEFINITIONS WERE ADDED BY SECTION 56(C). CO- OPERATIVE BANK WAS SEPARATELY DEFINED BY THE NEWLY INSERTED CLAUSE (CCI) AND PRIMARY CO- OPERATIVE BANK WAS SIMILARLY SEPARATELY DEFINED BY CLAUSE (CCV). THE PARLIAMENT WAS SIMPLY ASSIGNING A MEANING TO WORDS; IT WAS NOT INCORPORATING OR EVEN REFERRING TO THE SUBSTANTIVE PROVISIONS OF THE BR ACT. THE MEANING OF BANKING COMPANY MUST, THEREFORE, NECESSARILY BE STRICTLY CONFINED TO THE WORDS USED IN SECTION 5(C) OF THE BR ACT. IT WOULD HAVE BEEN THE EASIEST THING FOR PARLIAMENT TO SAY THAT BANKING COMPANY SHALL MEAN BANKING COMPANY AS DEF INED IN SECTION 5(C) AND SHALL INCLUDE CO- OPERATIVE BANK AS DEFINED IN SECTION 5(CCI) AND PRIMARY CO- OPERATIVE BANK AS DEFINED IN SECTION 5(CCV). HOWEVER, THE PARLIAMENT DID NOT DO SO. THER E WAS THUS A CONSCIOUS EXCLUSION AND DELIBERATE COMMISSION OF CO -OPERATIVE BANKS FROM THE PURVIEW OF THE RDB ACT. THE REASON FOR EXCLUDING CO-OPERATIVE BANKS SEEMS TO BE THAT CO-OPERATIVE BANKS HAVE COMP REHENSIVE, SELF- CONTAINED AND LESS EXPENSIVE REMEDIES AVAILABLE TO THEM UNDER THE STATE CO- OPERATIVE SOCIETIES ACTS OF THE STATES CONCERNED, W HILE OTHER BANKS AND FINANCIAL INSTITUTIONS DID NOT HAVE SUCH SPEEDY REM EDIES AND THEY HAD TO FILE SUITS IN CIVIL COURTS. 35. IN THE CASE OF NATIONAL MINERAL DEVELOPMENT CORPORATION LTD. VS. S TATE OF M.P AND ANOTHER REPORTED IN AIR 2004 SC 2456 , THE APEX COURT OBSERVED AS UNDER:- 29. THE PARLIAMENT KNOWING IT FULL WELL THAT THE I RON ORE SHALL HAVE TO UNDERGO A PROCESS LEADING TO EMERGENCE OF LUMPS, FINES, CONCE NTRATES AND SLIMES CHOSE TO MAKE PROVISION FOR QUANTIFICATION OF ROYALTY ONL Y BY REFERENCE TO THE QUANTITY OF LUMPS, FINES AND CONCENTRATES. IT LEFT SLIMES OU T OF CONSIDERATION. NOTHING PREVENTED THE PARLIAMENT FROM EITHER PROVIDING FOR THE QUANTITY OF IRON ORE AS SUCH AS THE BASIS FOR QUANTIFICATION OF ROYALTY. IT CHOSE TO MAKE PROVISION FOR THE QUANTIFICATION BEING AWAITED UNTIL THE EMERGENC E OF LUMPS, FINES AND CONCENTRATES. HAVING DONE SO THE PARLIAMENT HAS NOT SAID FINES INCLUDING SLIMES . THOUGH SLIMES ARE NOT FINES THE P ARLIAMENT COULD HAVE ASSIGNED AN ARTIFICIAL OR EXTENDED MEANING TO FINES FOR THE PURPOSE OF LEVY OF ROYALTY WHICH IT HAS CHOSEN NOT TO DO. IT IS CLEARLY SUGGESTIVE OF ITS INTENTION NOT TO TAKE INTO CONSID ERATION SLIMES FOR QUANTIFYING THE AMOUNT OF ROYALTY. THIS DELIBERATE OMISSION OF PARLIAMENT CANNOT BE MADE GOOD BY INTERPRETATIVE PROCESS SO AS TO CHARGE ROYALTY ON SLIMES BY READING SECTION 9 OF THE ACT DIVORCED FROM THE PROVISIONS OF THE SECOND SCHEDULE. EVEN IF SLIMES WERE TO BE HELD LIABLE TO CHARGE OF ROYALTY, THE QUESTION WOULD STILL HAVE RE MAINED AT WHAT RATE AND ON WHAT QUANTITY WHICH QUESTIONS CANNOT BE ANSWERED BY SECTION 9. 12 36. IN THE CASE OF GOPAL SARDAR, VS. KARUNA SARDAR REPORTED IN AIR 2004 SC 3068 , THE APEX COURT IN THE THE CONTEXT OF LIMITATION WITHIN WHICH RIGHT OF PREEMPTION MUST BE EXERCISED AND WHETHER IN THE CONTEXT OF THE RELEVAN T PROVISIONS CONTAINED IN WEST BENGAL LAND REFORMS AND LIMITATION ACT, 1963 APPLIED OR NO T, OBSERVED AS UNDER:- 8....PRIOR TO 15-2-1971, AN APPLICATION UNDER SECTI ON 8 WAS REQUIRED TO BE MADE TO THE REVENUE OFFICER SPECIFICALLY EMPOWERED BY THE STATE GOVERNMENT IN THIS BEHALF. THIS PHRASE WAS SUBSTITU TED BY THE PHRASE MUNSIF HAVING TERRITORIAL JURISDICTION BY THE AFORE MENTIONED AMENDMENT. EVEN AFTER THIS AMENDMENT WHEN AN APPLICATION IS RE QUIRED TO BE MADE TO SECTION 8 OF THE ACT EITHER TO APPLY SECTION 5 OF T HE LIMITATION ACT OR ITS PRINCIPLES SO AS TO ENABLE A PARTY TO MAKE AN APPLI CATION AFTER THE EXPIRY OF THE PERIOD OF LIMITATION PRESCRIBED ON SHOWING SUFFICIE NT CAUSE FOR NOT MAKING AN APPLICATION WITHIN TIME. THE ACT IS OF 1955 AND FOR ALL THESE YEARS, NO PROVISION IS MADE UNDER SECTION 8 OF THE ACT PROVID ING FOR CONDONATION OF DELAY. THUS, WHEN SECTION 5 OF THE LIMITATION AC T IS NOT MADE APPLICABLE TO THE PROCEEDINGS UNDER SECTION 8 OF TH E ACT UNLIKE TO THE OTHER PROCEEDINGS UNDER THE ACT, AS ALREADY STATED ABOVE, IT IS APPROPRIATE TO CONSTRUE THAT THE PERIOD OF LIMITATI ON PRESCRIBED UNDER SECTION 8 OF THE ACT SPECIFICALLY AND EXPRESSLY GOV ERNS AN APPLICATION TO BE MADE UNDER THE SAID SECTION AND NOT THE PERIOD P RESCRIBED UNDER ARTICLE 137 OF THE LIMITATION ACT . 37. IN OUR OPINION, THE TRIBUNAL COMMITTED AN ERROR IN APPLYING THE PRINCIPLE OF CONSCIOUS OMISSION IN THE PRESENT CASE. FIRSTLY, AS ALREADY OBSERVED, WE HAVE SERIOUS DOUBT WHETHER SUCH PRINCIPLE CAN BE APPLIED BY COMP ARING THE DRAFT PRESENTED IN PARLIAMENT AND ULTIMATE LEGISLATION WHICH MAY BE PA SSED. SECONDLY, THE STATUTORY PROVISION IS AMPLY CLEAR. 38. IN THE RESULT, WE ARE OF THE OPINION THAT SECTI ON 40(A)(IA) WOULD COVER NOT ONLY TO THE AMOUNTS WHICH ARE PAYABLE AS ON 31 TH MARCH OF A PARTICULAR YEAR BUT ALSO WHICH ARE PAYABLE AT ANY TIME DURING THE YEAR. OF COURSE, AS LONG AS THE OTHER REQUIREMENTS OF THE SAID PROVISION EXIST. IN THAT CONTEXT, IN OUR O PINION THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF M/S. MERILYN SHIPPING & TRANSPORTS VS. ACIT (SURPA), DOES NOT LAY DOWN CORRECT LAW. 39. WE ANSWER THE QUESTIONS AS UNDER:- QUESTION (1) IN THE NEGATIVE I.E. IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEES. QUESTION (2) ALSO IN THE NEGATIVE I.E. IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEES. THUS IT IS CLEAR THAT HON'BLE GUJARAT HIGH COURT HA S CONSIDERED ALL ASPECTS OF THE ISSUES RAISED IN THE DECISION OF SPE CIAL BENCH IN CASE OF MERILYN SHIPPING TRANSPORTERS V. ACIT (SUPR A). WE FURTHER FIND THAT THAT EVEN HON'BLE CALCUTTA HIGH COURT HAS OVERRULED THIS DECISION IN CASE OF CIT VS. CRESENT EXPORT SYNDICAT E. MOREOVER CHANDIGARH BENCH OF THE TRIBUNAL CONSISTENTLY HAS BEEN FOLLOWING THE DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF CIT V. SIKANDARKHAN N TUNWAR AND OTHERS (SUPRA) AS WELL AS THE DECISION OF HON'BLE CALCUTTA HIGH COURT IN CASE OF CIT VS. C RESENT EXPORT SYNDICATE (SUPRA). 25 NOW THE QUESTION ARISES WHETHER DISMISSAL OF SLP BY HON'BLE SUPREME COURT IN CASE OF CIT V. VECTOR SHI PPING SERVICES (P) LTD (SUPRA) WOULD CHANGE THE ABOVE LEG AL POSITION. WE ARE AFRAID THE ANSWER IS NO. THE H ON'BLE SUPREME COURT HAD ITSELF CONSIDERED THE ISSUE IN C ASE OF V.M. SALGAOCAR AND BROS. PVT LTD V. CIT, 243 ITR 38 3. IT WAS OBSERVED BY THE COURT ON THIS ISSUE AS UNDER: DIFFERENT CONSIDERATIONS APPLY WHEN A SPECIAL LEAV E PETITION UNDER ARTICLE 136 OF THE CONSTITUTION IS SIMPLY DISMISSED BY SAYING DISMIS SED, AND AN APPEAL PROVIDED UNDER ARTICLE 133 IS DISMISSED ALSO WITH THE WORDS THE A PPEAL IS DISMISSED. IN THE FORMER CASE IT HAS BEEN LAID DOWN BY THIS COURT THAT WHEN A SPECIA L LEAVE PETITION IS DISMISSED THIS COURT DOES NOT COMMENT ON THE CORRECTNESS OR OTHERWISE OF THE ORDER FROM WHICH LEAVE TO APPEAL IS SOUGHT. BUT WHAT THE COURT MEANS IS THAT IT DOES NOT CONSIDER IT TO BE A FIT CASE FOR EXERCISE OF ITS JURISDICTION UNDER ARTICLE 136 OF T HE CONSTITUTION. THAT CERTAINLY COULD NOT BE 13 SO WHEN AN APPEAL IS DISMISSED THOUGH BY A NON-SPEA KING ORDER. HERE THE DOCTRINE OF MERGER APPLIES. IN THAT CASE, THE SUPREME COURT UPH OLDS THE DECISION OF THE HIGH COURT OR THE TRIBUNAL FROM WHICH THE APPEAL IS PROVIDED UNDE R CLAUSE (3) OF ARTICLE 133. THIS DOCTRINE OF MERGER DOES NOT APPLY IN THE CASE OF DISMISSAL O F A SPECIAL LEAVE PETITION UNDER ARTICLE 136. WHEN AN APPEAL IS DISMISSED THE ORDER OF THE H IGH COURT IS MERGED WITH THAT OF THE SUPREME COURT. WE QUOTE THE FOLLOWING PARAGRAPH FRO M THE JUDGMENT OF THIS COURT IN THE CASE OF SUPREME COURT EMPLOYEES WELFARE ASSOCIATIO N V. UNION OF INDIA, AIR 1990 HON'BLE SUPREME COURT 334; [1989] 4 SCC 187 (AT PAG E 344 OF AIR 1990 S.C): 22. IT HAS BEEN ALREADY NOTICE THAT THE SPECIAL LE AVE PETITION FILED ON BEHALF OF THE UNION OF INDIA AGAINST THE SAID JUDGMENTS OF THE DELHI HIGH COURT WERE SUMMARILY DISMISSED BY THIS COURT. IT IS NOW A WELL SETTLED PRINCIPLE OF LAW TH AT WHEN A SPECIAL LEAVE PETITION IS SUMMARILY DISMISSED UNDER ARTICLE 136 OF THE CONSTITUTION, BY SUCH DISMISSAL THIS COURT DOES NOT LAY DOWN ANY LAW, AS ENVISAGED BY ARTICLE 141 OF THE CO NSTITUTION, AS CONTENDED BY THE LEARNED ATTORNEY-GENERAL. IN INDIAN OIL CORPORATION LTD. V. STATE OF BIHAR [1987] 167 ITR 897; [1986] 4 SCC 146; AIR 1986 HON'BLE SUPREME COURT 17 80, IT HAS BEEN HELD BY THIS COURT THAT THE DISMISSAL OF A SPECIAL LEAVE PETITION IN L IMINE BY A NON-SPEAKING ORDER DOES NOT JUSTIFY ANY INFERENCE THAT, BY NECESSARY IMPLICATIO N, THE CONTENTIONS RAISED IN THE SPECIAL LEAVE PETITION ON THE MERITS OF THE CASE HAVE BEEN REJECTED BY THE SUPREME COURT. IT HAS BEEN FURTHER HELD THAT THE EFFECT OF A NON-SPEAKING ORDER OF DISMISSAL OF A SPECIAL LEAVE PETITION WITHOUT ANYTHING MORE INDICATING THE GROUN DS OR REASONS OF ITS DISMISSAL MUST, BY NECESSARY IMPLICATION, BE TAKEN TO BE THAT THE SUPR EME COURT HAD DECIDED ONLY THAT IT WAS NOT A FIT CASE WHERE SPECIAL LEAVE SHOULD BE GRANTE D. IN UNION OF INDIA V. ALL INDIA SERVICES PENSIONERS ASSOCIATION [1988] 2 SCC 580; AIR 1988 HON'BLE SUPREME COURT 501, THIS COURT HAS GIVEN REASONS FOR DISMISSING THE SPECIAL LEAVE PETITION. WHEN SUCH REASONS ARE GIVEN, THE DECISION BECOMES ONE WHICH ATTRACTS ARTI CLE 141 OF THE CONSTITUTION WHICH PROVIDES THAT THE LAW DECLARED BY THE SUPREME COURT SHALL BE BINDING ON ALL THE COURTS WITHIN THE TERRITORY OF INDIA. IT, THEREFORE, FOLLO WS THAT WHEN NO REASON IS GIVEN, BUT A SPECIAL LEAVE PETITION IS DISMISSED SIMPLICITER, IT CANNOT BE SAID THAT THERE HAS BEEN A DECLARATION OF LAW BY THIS COURT UNDER ARTICLE 141 OF THE CONSTITU TION. IT WAS, THEREFORE, CONTENDED THAT ONCE THIS COURT I N CIVIL APPEAL NO. 424 OF 1999, HAS DISMISSED THE APPEAL IT HAS UPHELD THE ORDER OF THE HIGH COURT IN THE CASE OF THE ASSESSMENT YEAR 1980-81 AND IT CANNOT TAKE A DIFFER ENT VIEW FOR THE ASSESSMENT YEAR 1979-80. THERE APPEARS TO BE SUBSTANCE IN THE SUBMI SSION OF THE ASSESSEE. FROM ABOVE IT BECOMES CLEAR THAT AFTER AN SLP IS DI SMISSED IN LIMINE OR SIMPLICTOR AS SUCH THEN IT CANNOT BE SAID THAT THE HON'BLE SUPREME COURT HAS COMMENTED ON THE MERITS O F THE ISSUE. IT IS A SIMPLE CASE OF REJECTION OF PRAYER FOR ENTERTAINING THE SLP. THE SAME VIEW WAS TAKEN BY T HE HON'BLE SUPREME COURT AGAIN IN CASE OF KUNHAYAMMED AND OTHERS V STATE OF KERALA AND ANOTHER, 245 ITR 360 ( S.C). HEAD NOTE READS AS UNDER: ARTICLE 136 OF THE CONSTITUTION OF INDIA CONFERS A SPECIAL JURISDICTION ON THE SUPREME COURT WHICH IS SWEEPING IN NATURE. IT IS A RESIDUARY POWE R IN THE SENSE THAT IT CONFERS AN APPELLATE JURISDICTION ON THE SUPREME COURT SUBJECT TO SPECIA L LEAVE BEING GRANTED IN SUCH MATTERS AS MAY NOT BE COVERED BY THE PRECEDING ARTICLES. EVEN IN THE FIELD COVERED BY THE PRECEDING ARTICLES, JURISDICTION CONFERRED BY ARTICLE 136 IS AVAILABLE TO BE EXERCISED IN AN APPROPRIATE CASE. IT IS AN UNTRAMMELED RESERVOIR OF POWER INCAP ABLE OF BEING CONFINED TO DEFINITIONAL BOUNDS; THE DISCRETION CONFERRED ON THE SUPREME COU RT BEING SUBJECTED TO ONLY ONE LIMITATION, THAT IS, THE WISDOM AND GOOD SENSE OR S ENSE OF JUSTICE OF THE JUDGES. NO RIGHT OF APPEAL IS CONFERRED UPON ANY PARTY; ONLY A DISCRETI ON IS VESTED IN THE SUPREME COURT TO INTERFERE BY GRANTING LEAVE TO AN APPLICANT TO ENTE R IN ITS APPELLATE JURISDICTION NOT OPEN OTHERWISE AND AS OF RIGHT. THE JURISDICTION CONFERRED BY ARTICLE 136 IS DIVISI BLE INTO TWO STAGES; THE FIRST STAGE IS UP TO THE DISPOSAL OF THE PRAYER FOR SPECIAL LEAVE TO APP EAL; THE SECOND STAGE COMMENCES IF AND WHEN THE LEAVE TO APPEAL IS GRANTED AND THE PETITIO N FOR SPECIAL LEAVE TO APPEAL IS CONVERTED INTO AN APPEAL. WHILE HEARING THE PETITION FOR SPECIAL LEAVE TO APP EAL, THE SUPREME COURT IS CALLED UPON TO SEE WHETHER THE PETITIONER SHOULD BE GRANTED SUCH L EAVE OR NOT. WHILE HEARING SUCH PETITION 14 THE SUPREME COURT DOES NOT EXERCISE ITS APPELLATE J URISDICTION; IT MERELY EXERCISES ITS DISCRETIONARY JURISDICTION TO GRANT OR NOT TO GRANT LEAVE TO APPEAL IF THE PETITION SEEKING GRANT OF SPECIAL LEAVE IS D ISMISSED, IT IS AN EXPRESSION OF OPINION BY THE SUPREME COURT THAT A CASE FOR INVOKING THE APPE LLATE JURISDICTION OF THE COURT WAS NOT MADE OUT. AN ORDER REFUSING SPECIAL LEAVE TO APPEAL MAY BE BY A NON SPEAKING ORDER OR BY A SPEAKING ORDER. IN EITHER CASE IT DOES NOT ATTRACT THE DOCTR INE OF MERGER. AN ORDER REFUSING SPECIAL LEAVE TO APPEAL DOES NOT STAND SUBSTITUTED IN THE P LACE OF THE ORDER UNDER CHALLENGE. ALL THAT IT MEANS IS THAT THE SUPREME COURT WAS NOT INC LINED TO EXERCISE ITS DISCRETION SO AS TO ALLOW THE APPEAL BEING FILED. WHATEVER BE THE PHRAS EOLOGY EMPLOYED IN THE ORDER OF DISMISSAL, IF IT IS A NON-SPEAKING ORDER, I.E., IT DOES NOT ASSIGN REASONS FOR DISMISSING THE SPECIAL LEAVE PETITION, IT WOULD NEITHER ATTRACT TH E DOCTRINE OF MERGER SO AS TO STAND SUBSTITUTED IN THE PLACE OF THE ORDER PUT IN ISSUE BEFORE IT, NOR BE A DECLARATION OF LAW BY THE SUPREME COURT UNDER ARTICLE 141 OF THE CONSTITUTION FOR THERE IS NO LAW WHICH HAS BEEN DECLARED. IF THE ORDER REFUSING SPECIAL LEAVE TO APPEAL IS A SPEAKING ORDER, I.E., IT GIVES REASONS FOR REFUSING THE GRANT OF LEAVE, THEN THE ORDER HAS TWO IMPLICATIONS. FIRSTLY, THE STATEMENT OF LAW CONTAINED IN THE ORDER IS A DECLARATION OF LAW BY T HE SUPREME COURT WITHIN THE MEANING OF ARTICLE 141 WHICH WILL OBVIOUSLY BE BINDING ON ALL COURTS AND TRIBUNALS IN INDIA AND CERTAINLY THE PARTIES THERETO. SECONDLY, OTHER THAN THE DECLA RATION OF LAW, WHATEVER IS STATED IN THE ORDER ARE THE FINDINGS RECORDED BY THE SUPREME COUR T WHICH WOULD BE BINDING ON THE PARTIES AND THE COURT, TRIBUNAL OR AUTHORITY WHOSE ORDER WAS UNDER CHALLENGE, IN ANY PROCEEDINGS SUBSEQUENT THERETO, ON THE PRINCIPLE OF JUDICIAL DISCIPLINE, THE SUPREME COURT BEING THE APEX COURT OF THE COUNTRY. THE DECLARATIO N OF LAW WILL BE GOVERNED BY ARTICLE 141 BUT, THE CASE NOT BEING ONE WHERE LEAVE IS GRANTED, THE DOCTRINE OF MERGER DOS NOT APPLY. FROM ABOVE IT BECOMES CLEAR THAT IF AN SLP IS DISMI SSED THEN IT CANNOT BE SAID THAT THE HON'BLE SUPREME COURT H AS LAID DOWN ANY LAW. NOW IN THE PRESENT CASE THE SLP IN C ASE OF CIT V VECTOR SHIPPING SERVICES (SUPRA) FOLLOWING OR DER HAS BEEN PASSED BY THE HON'BLE SUPREME COURT : HEARD MR. MUKUL ROHTAGI, LD. ATTORNEY GENERAL, FOR THE PETITIONER DELAY IN FILING AND REFILLING SPECIAL LEAVE PETITIO N IS CONDONED SPECIAL LEAVE PETITION IS DISMISSED THEREFORE IT IS A CASE OF SIMPLE DISMISSAL OF SLP A ND CANNOT BE SAID TO HAVE LAID DOWN ANY LAW. IN VIEW OF THIS DISCUSSION AND THE EARLIER DISCUSSION WE HAVE PREFERRED TO FOL LOW THE DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF C IT V. SIKANDARKHAN N. TUNVAR & ORS, (SUPRA) INSTEAD THE D ECISION OF HON'BLE ALLAHABAD HIGH COURT IN CASE OF CIT V VECTO R SHIPPING SERVICES (SUPRA), WE DECIDE THIS ISSUE AGA INST THE ASSESSEE AND CONFIRM THE ORDER OF LD. CIT(A). 10. ANOTHER QUESTION ARISE IS WHETHER THE HON'BL E HIGH COURT HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE IN CASE OF CIT VS M/S RAJINDER PARSHAD JAIN (SUPRA). THOSE DAYS, AS STATED ABOVE, ORIGINALLY THE TRIBUNAL WAS FOLLOWING THE DE CISION OF SPECIAL BENCH BECAUSE TRIBUNAL WAS BOUND TO FOLLOW THE 15 DECISION OF SPECIAL BENCH. THE HON'BLE HIGH COURT DECIDED THIS ISSUE AS UNDER : AS REGARDS THE QUESTION RELATING TO DEDUCTION OF TA X AT SOURCE, SUFFICE IT TO STATE THAT THE TRIBUNAL HAS MERELY RES TORED THE MATTER TO THE ASSESSING OFFICER BY ASKING HIM TO VERIFY TH E TRANSACTIONS AND IF FOUND TO BE CORRECT, PASS ORDERS ACCORDINGLY BY HO LDING AS FOLLOWS: - '8. ON PERUSAL OF THE RECORD WE FIND THAT THE ISSUE IN THIS APPEAL IS IN RELATION TO THE DISALLOWANCE MADE OUT OF PAYMENTS OF LABOUR CHARGES PAID FOR NON DEDUCTION OF TAX AT SOURCE UNDER THE PROVISIONS OF SECTION 194C OF THE ACT. THE SAID DISALLOWANCE WAS MADE BY INVOKING THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE SPECIAL BENCH OF VISHAKHAPATNAM REPORTED IN ACIT VS. MERILYN SHIPPING & TRANSPORTS [136 ITD 23 (SB) (VISHAKHAPATNAM)] HAD LAID DOWN THE PRINCIPLE THAT WHERE THE AMOUNTS HAVE BEEN PAID DURING THE YEAR UNDER CONSIDERATION ITSELF AND NOTH ING IS PAYABLE AT THE CLOSE OF THE YEAR, NO DISALLOWANCE WAS WARRANTED UNDER SECTION 40(A)(IA) OF THE ACT FOR NON DEDUCTION OF TAX AT SOURCE OUT OF SUCH AMOUNT PAID DURING THE YEAR. FOLLOWING THE ABOVE SAID PARITY OF REASONING, WE DIRECT THE ASSESSING OFFICER TO VER IFY THE STAND OF THE ASSESSEE AND IN CASE THE SAID AMOUNTS HAVE BEEN PAID BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION, NO DISALLOWANCE IS WARRANTED OUT OF SAID PAYMENTS IN LINE WITH THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. REASONAB LE OPPORTUNITY OF HEARING SHALL BE AFFORDED TO THE ASSESSEE BY THE ASSESSING OFFICER FOR ADJUDICATING THE ISSUE. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES.' WE FIND NO REASON WHETHER IN FACT OR IN LAW TO INTER FERE WITH THE ABOVE FINDING AS THE TRIBUNAL HAS LEFT IT ON THE ASSE SSING OFFICER TO DETERMINE WHETHER PAYMENTS WERE MADE BY THE ASSESSE E DURING THE YEAR UNDER CONSIDERATION. 11. FROM THE ABOVE, IT BECOMES CLEAR THAT HON'BLE HIGH COURT HAS SIMPLY CONFIRMED THE FINDINGS OF TRIBUNAL. BUT IF THE DECISION OF SPECIAL BENCH IS STAYED BY THE ANDHRA P RADESH HIGH COURT AND IN THE MEANTIME THE TRIBUNAL RELYING ON T HE DECISION OF GUJRAT HIGH COURT IN CIT VS SIKANDARKHAN N. TUNV AR & ORS (SUPRA) AND CALCUTTA HIGH COURT IN CRESCENT EXPORT SYNDICATE (SUPRA) WHICH CLEARLY SHOWS THAT LEGAL POSITION HAS CHANGED AND 16 THEREFORE, OBSERVATION OF THE HIGH COURT IN CASE OF M/S RAJINDER PARSHAD JAIN (SUPRA) CANNOT BE FOLLOWED. 12. THEREFORE, IN VIEW OF ABOVE DETAILED DISCU SSION, ADDITION UNDER SECTION 40(A)(IA) HAS TO BE CONFIRMED EXCEPT TO THE EXTENT OF INTEREST PAID TO M/S KOTAK MAHINDRA PRIME LTD. WHER E IT WAS STATED THAT THE SAME WAS ON ACCOUNT OF HIRE-PURCHAS E AGREEMENT AND WHICH HAS NOT BEEN EXAMINED. THE SIMILAR OBSER VATION WAS MADE BY THE TRIBUNAL IN ASSESSMENT YEAR 2006-07 AGA INST THIS PARTY. HERE WE MAY ALSO NOTE THAT DURING THE HEARI NG, LD. COUNSEL FOR THE ASSESSEE WAS ASKED A QUESTION WHETH ER ASSESSEE HAS FILED ANY APPEAL AGAINST THE ORDER PASSED IN AS SESSMENT YEAR 2006-07. IT WAS ADMITTED THAT NO APPEAL HAS BEEN F ILED. THEREFORE, ORDER OF THE TRIBUNAL HAS BECOME FINAL A ND THE SAME HAS TO BE FOLLOWED. IN THESE CIRCUMSTANCES, WE CON FIRM THE ORDER OF LD. CIT(APPEALS) EXCEPT TO THE EXTENT OF PAYMENT MADE TO M/S KOTAK MAHINDRA PRIME LTD. WHICH WE SET ASIDE TO THE FILE OF ASSESSING OFFICER FOR EXAMINATION OF THE AGREEMENT AND TO DETERMINE WHETHER IT IS HIRE-PURCHASE AGREEMENT OR NOT AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH THE LAW. THERE FORE, THIS GROUND IS PARTLY ALLOWED. GROUND NO. 2 13. AFTER HEARING BOTH THE PARTIES, WE FIND THA T DURING ASSESSMENT PROCEEDINGS, ASSESSING OFFICER NOTICED T HAT ASSESSEE HAS MADE INVESTMENT OF RS. 16,10,000/- WITH M/S CHA NDIGARH CABLES PVT. LTD., THEREFORE HE INVOKED THE PROVISIO NS OF SECTION 14A READ WITH RULE 8D AND MADE A DISALLOWANCE OF RS . 25,386/-. ON APPEAL, THE ADDITION WAS CONFIRMED BY LD. CIT(AP PEALS). 17 14. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT THIS ISSUE IS COVERED BY THE DECISION OF TRIBUNAL IN ITA NO. 1005/CHD/2010 IN ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2006-07. 15. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDER OF LD. CIT(APPEALS). 16. AFTER HEARING RIVAL SUBMISSIONS, WE FIND THAT THIS ISSUE WAS DECIDED PARTLY IN FAVOUR OF THE ASSESSEE VIDE PARA 26, WHICH IS AS UNDER : 26. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE FI ND THAT HON'BLE BOMBAY HIGH COURT IN THE CASE OF GODREJ & B OYCE MANUFACTURING CO. LTD. VS DCIT AND ANOTHER (2010) 3 28 ITR 81 (BOM.) HAS CLEARLY HELD THAT RULE 8D IS APPL ICABLE FROM ASSESSMENT YEAR 2008-09 AND HAS NO RETROSPECTI VE APPLICATION. FURTHER, IT HAS BEEN OBSERVED THAT ONL Y REASONABLE DISALLOWANCE CAN BE MADE BY THE ASSESSING OFFICER F OR EARLIER YEARS AFTER EXAMINING THE FACTS. IN THE CASE BEFORE US, VERY LITTLE AMOUNT HAS BEEN INVESTED. IT WAS FURTHER POI NTED OUT BY THE LD. COUNSEL THAT INVESTMENT WAS MADE ABOUT 15 YEARS BACK, THEREFORE, IT CANNOT BE SAID THAT INVESTMENT HAS BEEN MADE OUT OF THE BORROWED FUNDS. CONSIDERING THESE FACTS, WE ESTIMAT E THE. DISALLOWANCE US/ 14A AT RS. 5,000/-- AND ACCORDINGL Y WE SET ASIDE THE ORDER OF LD. CIT(A) AND DIRECT THE ASSESS ING OFFICER TO MAKE DISALLOWANCE OF RS. 5,000/-. 17. FOLLOWING THE ABOVE, WE SET ASIDE THE ORDER OF LD. CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO MA KE DISALLOWANCE OF RS. 5000/- UNDER SECTION 14A OF THE ACT. 18. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH,2015. SD/- SD/- (BHAVNESH SAINI) (T. R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 13 TH MARCH,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT ,CHD