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CA Sandesh Mundra

Consult Us For Construction

Non-Deduction of TDS - Amendment in Budget 2012 - Section 40a(ia)

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The amendment to Section 201, not to treat the deductor in default is proposed to be effective from 1st July, 2012 whereas amendment to Section 40(a)(ia) is poposed w.e.f 1st April, 2013. It is interesting but not surpirsing to note that so many amendments favouring revenue are proposed to be retrospective being clarificatory in nature and the one favouring tax payer which in real sense is clarificatory in nature in proposed to be effective prospectively. Despite this considering the fact that a deeming fiction is being created under the proposed amendment it may be interpreted by court to be clarificatory and hence applicable retrospectively.


The Calcutta High Court recently in the case of CIT vs. Virgin Creations has held that the amendement made to Section 40a(ia) by Finance Act, 2010 of allowing the benefit of payment made before due date of filing return of income under Section 139(1) is clarificatory and have retrospective operation.

The Calcutta High Court has referred to the judgement of Supreme Court in the case of R.B. Jodha Kuthiala vs. CIT (1971) 82 ITR 570 (SC), whereby it was held that the provision which was inserted as a remedy to make the provision workable, requires to be treated with retrospective operation so that reasonable deduction can be given to section as well.

(Extract From the article wrtten by CA Ved Jain in CA Journal - April 2012)

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CA Sandesh Mundra, Consultant – Management Audit and Indirect Taxation - Chartered Accountant, Diploma in Information System Audit, Diploma in Insurance & Risk Management , Certificate from ICAI on International Financial Reporting Standards. Actively associated with clients in the industrial construction sector since last 9 years.He possesses special skills in structuring the indirect tax component of the works contracts and as management auditor, has visited several construction sites in various states like Orissa, Rajasthan, Gujarat, Maharasthra, Madhya Pradesh etc. During the course of said visits he has been to very large industrial complexes, refineries, power plants etc


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We are Ahmedabad based professional consulting firm. We are providing various services to Construction, Real Estate and Project Companies in various areas like Indirect Taxation – Service Tax & Multi state VAT consultancy, ERP implementation, Site & Management audit, Designing Tender & other related contractual documents etc.